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Executive Directors\u2019 remuneration (audited)
The following table details the total remuneration of the Directors in office during 2024 and 2023:
2024
2023
Salary
Pension
contribution1
Annual
taxable
benefits2
Total
fixed
Variable
remuneration
Total
Salary
Pension
contribution1
Annual
taxable
benefits2
Total
fixed
Variable
remuneration
Total
Remuneration
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Executive Directors
Colin Hunt
500
100
31
631
13
644
500
100
\u2014
600
13
613
Donal Galvin
485
97
31
613
13
626
485
97
15
597
13
610
985
197
62
1,244
26
1,270
985
197
15
1,197
26
1,223
1. Pension Contribution represents agreed payments to a defined contribution scheme, to provide post-retirement pension benefits for Executive Directors from the
normal retirement date, and (ii) an allowance in lieu where Executive Directors\u2019 accumulated pension benefits have exceeded or are likely to exceed the Standard
Fund Threshold (\u2018SFT\u2019).
2. Annual Taxable Benefit represents a non-pensionable cash allowance in lieu of a company car, medical insurance and other contractual benefits.
Fixed Remuneration (audited)
Base salaries of the Chief Executive Officer and the Chief Financial Officer were \u20ac 500,000 and \u20ac 485,000 respectively and remained unchanged
from 2023. The Chief Executive Officer and Chief Financial Officer received a non-pensionable cash allowance of \u20ac 30,000.
The Chief Executive Officer received an employer pension contribution of 20% (\u20ac 100,000) which was taken as an allowance in lieu of pension
contribution. The Chief Financial Officer also received an employer pension contribution of 20% (\u20ac 97,000).
Non-Executive Directors\u2019 remuneration (audited)
The following table details the total remuneration of the Directors in office during 2024 and 2023:
2024
2
4
2023
Director\u2019s Fees
Director\u2019s Fees
\u20ac 000
\u20ac 000
Non-Executive Directors1
Anik Chaumartin
80
80
Basil Geoghegan
75
75
Tanya Horgan
80
80
Sandy Kinney Pritchard
95
95
Elaine MacLean
85
85
Andy Maguire2
115
110
Brendan McDonagh (Deputy Chair)
135
135
Helen Normoyle3
188
186
Ann O'Brien4
130
119
Fergal O'Dwyer5
155
155
Jim Pettigrew (Chair)
365
365
Jan Sijbrand
80
80
Raj Singh
80
80
Total
1,663
1,645
Former Non-Executive Directors
Anne Maher6
\u2014
19
1. All Non-Executive Directors were paid a basic, non-pensionable fee in respect of service as a Director of \u20ac 65,000 and additional non-pensionable remuneration in
respect of other responsibilities, such as through the chairing or membership of Board Committees or performing the role of Deputy Chair or Senior Independent
Director. Current or former Directors who serve on the board of any Group Irish subsidiary company are also\u00a0paid a non-pensionable flat fee for their services as a
Director, chairing or membership of Board Committees.
2. Andy Maguire was paid \u20ac 35k in 2024 (2023: \u20ac 30k, appointed 17 February 2023) in respect of his appointment as a Director of AIB Mortgage Bank U.C.
3. Current or former Non\u2011Executive Directors of AIB Group plc and Allied Irish Banks, p.l.c., as applicable, who also serve as Directors of AIB Group (UK) p.l.c.
(\u2018AIB\u00a0UK\u2019) are separately paid a non-pensionable flat fee, which is independently agreed and paid by AIB UK, in respect of their service as a Director of that
company. In that regard, Helen Normoyle earned fees during 2024 of \u20ac 73k (2023: \u20ac 71k).
4. Ann O\u2019Brien was paid \u20ac 40k in 2024 (2023: \u20ac 29k, appointed 11 April 2023) in respect of her appointment as a Director of EBS d.a.c.
5. Fergal O\u2019Dwyer earned fees during 2024 of \u20ac 80k (2023: \u20ac 80k) in his role as Director and Chair of the Audit Committee of Goodbody.
6. Anne Maher is a former Non-Executive Director of Allied Irish Banks, p.l.c., who was a Director of the Corporate Trustee of the AIB Defined Contribution Scheme
during 2023, in respect of which she earned the fees as quoted.
(i) Transactions with Key Management Personnel
Loans to KMP and their close family members (\u2018CFM\u2019) are made in the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable transactions with other persons of similar standing not connected with
the Group, and do not involve more than the normal risk of collectability or present other unfavourable features. Loans to Directors and Senior
Executive Officers are made on terms available to other employees in the Group generally, in accordance with established policy, within limits
set\u00a0on a case-by-case basis.
2024
2023
Balance at
1\u00a0January
2024
Balance at
31 December
2024
Total
number of
relevant
KMP/CFM at
1 January
2024
Total number
of relevant
KMP/CFM at
31 December
2024
Balance at
1 January
2023
Balance at
31 December
2023
Total
number of
relevant
KMP/CFM\u00a0 at
1 January
2023
Total number
of relevant
KMP/CFM at
31 December
2023
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Loans
1,975
2,281
13
15
1,563
1,975
13
13
Deposits
2,084
2,211
29
33
2,048
2,084
32
29
Total commitments outstanding refers to the total of any undrawn amounts on credit cards and/or overdraft facilities provided to KMP and their
CFM. Total commitments outstanding as at 31 December 2024 were \u20ac 0.09 million (2023: \u20ac 0.12 million). An expected credit loss allowance is held
for all loans\u00a0and advances. Accordingly, a total expected credit loss allowance of less than \u20ac 1,000 was held on the above facilities at 31 December
2024 (2023: \u20ac 1,000).
46\u00a0 Related party transactions continued
(e) IAS 24 Related Party Disclosures continued
(ii) Compensation of Key Management Personnel
Details of compensation paid to KMP are provided below. The figures shown include the figures separately reported in respect of Directors\u2019
remuneration on pages 163 and 165.
2024
2023
\u20ac m
\u20ac m
Short term benefits (salaries, fees and other short-term benefits)
8.4
7.5
Post-employment benefits1
1.1
1.0
Termination benefits
\u2014
0.4
Total compensation of key management personnel
9.5
8.9
1. Comprises payments to defined benefit or defined contribution pension schemes, in accordance with actuarial advice, to provide post-retirement pensions. The Group\u2019s
defined benefit pension schemes closed to future accrual with effect from 31 December 2013 and all employee pension benefits have accrued on the basis of defined
contributions since that date.
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Group Credit Risk Framework (audited)
The Group implements and operates policies to govern the
identification, assessment, approval, monitoring and reporting of credit
risk. The Group Credit Risk Framework is the overarching Board
approved document which sets\u00a0out the principles of how the Group
identifies, assesses, approves, monitors and reports credit risk to
ensure that robust credit risk management is in place. This document
contains the minimum standards and principles that are applied across
the Group to provide a common, robust and consistent approach to the
management of credit risk. The Group Credit Risk Framework is
supported by a suite of credit policies, standards and guidelines which
define in greater detail the minimum standards and credit risk metrics to
be applied for specific products, business lines and market segments.
Credit approval overview (audited)
The Group operates credit approval criteria which:
\u2022 Include a clear indication of the Group\u2019s target market(s), in\u00a0line\u00a0with
Group and segment risk appetite statements;
\u2022 Require a thorough understanding and assessment of the borrower
or counterparty, as well as the purpose and structure of credit, and
the source of repayment; and
\u2022 Enforce compliance with minimum credit assessment and facility
structuring standards.
Credit risk approval is undertaken by professionals operating within a
defined delegated authority framework. However, for certain selected
retail portfolios, scorecards and automated strategies (together referred
to as \u2018score enabled decisions\u2019) are deployed to automate and to
support credit decisions and credit management (e.g. score enabled
auto-renewal of overdrafts).
The Board is the ultimate credit approval authority in the Group. The
Board has delegated credit authority to various credit committees and
to the Chief Credit Officer (\u2018CCO\u2019). The CCO is permitted to further
delegate this credit authority to individuals within the Group on a risk
appropriate basis. Credit limits are approved in accordance with the
Group\u2019s risk policies and\u00a0guidelines.
All exposures above certain levels require approval by the Group Credit
Committee (\u2018GCC\u2019) and/or Board. Other exposures are approved
according to a structure of tiered individual authorities which reflect
credit competence, proven judgement and experience. Depending on
the borrower/connection, grade and the level of exposure, limits are
sanctioned by the relevant credit authority. Material lending proposals
are referred to credit units for independent assessment/approval or
formulation of a recommendation and subsequent adjudication by the
applicable approval authority.
The Group also has in place an Interbank Exposure Policy which
establishes the maximum exposure for each counterparty bank,
depending on credit grade rating. Each bank is assessed for the
appropriate maximum exposure limit in line with the policy. Risk
generating business units in each segment are required to have an
approved bank and country limit prior to granting any credit facility, or
approving any credit obligation or commitment which has the potential
to create interbank or country exposure.
ECL governance (audited)
The Board has put in place a framework, incorporating the governance
and delegation structures commensurate with a material risk, to ensure
credit risk is appropriately managed throughout the Group.
The key governance points in the ECL allowance approval process
during 2024 were:
\u2022 Model Risk Committee;
\u2022 Asset and Liability Committee;
\u2022 Business level ECL Forum;
\u2022 Group Credit Committee; and
\u2022 Board Audit Committee.
For ECL governance, the Group\u2019s senior management employ expert
judgement in assessing the adequacy of the ECL allowance. This is
supported by detailed information on the portfolios of credit risk
exposures and by the outputs of the measurement and classification
approaches, coupled with internal and external data provided on both
the short term and long term economic outlook. Business segments
and Group management are required to ensure that there are
appropriate levels of cover for all of the credit portfolios and must take
account of both accounting and regulatory compliance when assessing
the expected levels of loss.
Assessment of the credit quality of each business segment and
subsidiaries is initially informed by the output of the quantitative
analytical models but may be subject to management adjustments.
This ECL output is then scrutinised and approved at individual business
unit level (ECL Forum), which also includes subsidiaries, prior to
onward submission to the GCC.
GCC reviews and challenges ECL levels for onward recommendation
to the Board Audit Committee as the final approval authority. The Board
Audit Committee then recommends the Group\u2019s financial results to the
Board for ultimate final approval.
Credit risk organisation and structure (audited)
The Group\u2019s credit risk management structure operates through
a\u00a0hierarchy of lending authorities. All customer loan requests are
subject to a credit assessment process. The role of the Credit Risk
function is to provide direction, independent oversight of and challenge
to credit risk-taking.
Internal credit ratings (audited)
One of the objectives of credit risk management is to accurately quantify
the level of credit risk to which the Group is exposed through the initial
credit approval and ongoing review process. All\u00a0relevant exposures are
assigned to a rating model and within that to an internal risk grade (rating).
A grade is assigned on the basis of rating criteria within each rating model
from which estimates of probability of default (\u2018PD\u2019) are derived.
Internal credit grades are fundamental in assessing the credit quality of
loan exposures, and for assessing capital requirements for portfolios
where prior regulatory approval has been received. Internal credit
grades are key to management reporting, credit portfolio analysis,
credit quality monitoring and in determining the level and nature of
management attention applied to exposures. Changes in the objective
information are reflected in the credit grade of the borrower/loan with
the resultant grade influencing the management of individual loans. In
line with the Group\u2019s credit management lifecycle, heightened credit
management and special attention is paid to lower quality performing
loans or \u2018criticised\u2019 loans and non-performing/defaulted loans, which are
defined on page 188.
Using internal models, the Group utilises a credit grading masterscale
that gives it the ability to categorise credit risk across different rating
models and portfolios in a\u00a0consistent manner. The masterscale
consolidates complex credit information into a single attribute, aligning
the output from the risk models with the Group\u2019s Forbearance and
Definition of Default and Credit Impairment policies. The masterscale
grades are driven by grading model appropriate through the cycle PDs
combined with other asset quality indicators such as default, forbearance
and arrears in order to provide the Group with a mechanism for ranking
and comparing credit risk associated with a range of customers.
2.1 Credit risk continued
Internal credit ratings continued (audited)
Masterscale categorises loans into a broad range of grades which can be
summarised into the following categories: strong/satisfactory grades;
criticised grades; and non-performing/default loans. The profile of the
Group\u2019s loan portfolio under each of the above grade categories is set out
on page 207.
The IFRS 9 PD modelling approach uses a combination of rating
grades and scores obtained from these credit risk models along with
key factors such as the current/recent arrears status or the current/
recent forbearance status and macroeconomic factors to obtain the
relevant IFRS 9 12 month and Lifetime PDs (i.e. point in time). The
Group has set out its methodologies and judgements exercised in
determining its expected credit loss under IFRS 9 on pages 190 to 201.
Strong/satisfactory (audited)
Accounts are considered strong/satisfactory if they have no current or
recent credit distress and the probability of default is typically less than
6.95%, they are not in arrears and there are no indications that they are
unlikely to repay.
\u2022 Strong (typically with a PD less than 0.99%): Strong credit with no
weakness evident.
\u2022 Satisfactory (typically with a PD greater than or equal to 0.99% and
less than 6.95%): Satisfactory credit with no weakness evident.
Criticised (audited)
Accounts of lower credit quality and considered as less than
satisfactory are referred to as criticised and include the following:
\u2022 Criticised watch: The credit is exhibiting weakness in terms of credit
quality and may need additional management attention; the credit
may or may not be in arrears.
\u2022 Criticised recovery: Includes forborne cases that are classified
as\u00a0performing including those which have transitioned from
non\u2011performing forborne, but still require additional management
attention to monitor for re-default and continuing improvement in
terms of credit quality.
Non-performing/default (audited)
The Group\u2019s definition of default is aligned with the EBA \u2018Guidelines on
the application of the definition of default\u2019 under Article 178 of the
Capital Requirements Regulation and ECB Banking Supervision
Guidance to Banks on non-performing loans.
The Group has aligned the definitions of \u2018non-performing\u2019, \u2018classification
of default\u2019 and IFRS 9 Stage 3 \u2018credit impaired\u2019, with the exception of
loans measured at fair value through profit or loss, and those loans
which have been derecognised and newly originated in Stage 1 or
POCI (purchased or originated credit impaired) which are no longer
classified as credit impaired but continue to be classified as non-
performing and in default. This alignment ensures consistency with the
Group\u2019s internal credit risk management and assessment practices.
Loans are identified as non-performing or defaulted by a number of
characteristics. The key criteria resulting in a classification of non-
performing are:
\u2022 Where the Group considers a borrower to be unlikely to pay their
loans in full without realisation of collateral, regardless of the
existence of any past-due amount; or
\u2022 The borrower is 90 days or more past due on any material loan. Day
count starts when any material amount of principal, interest or fee
has not been paid by a borrower on the due date.
The criteria for the definition of financial distress and forbearance are
included in the Group\u2019s Forbearance Policy. Criteria for the
identification of non-performing exposures and unlikeliness to pay are
included in the Group\u2019s Definition of Default and Credit Impairment
Policy.
Credit risk monitoring (audited)
The Group has developed and implemented processes and information
systems to monitor and report on individual credits and credit portfolios
in order to manage credit risk effectively. It\u00a0is\u00a0the Group\u2019s practice to
ensure that adequate up-to-date credit\u00a0management information is
available to support the credit management of individual account
relationships and the overall loan portfolio.
Credit risk, at a portfolio level, is monitored using key risk indicators
and early warning indicators which are reported regularly to senior
management and to the Board Risk Committee. Credit managers
proactively manage the Group\u2019s credit risk exposures at a transaction
and relationship level. Monitoring includes credit exposure and excess
management, regular review of accounts, being up-to-date with any
developments in customer business, obtaining updated financial
information and monitoring of covenant compliance. This is reported on
a regular basis to senior management and includes information and
detailed commentary on loan book growth, quality of the loan book and
expected credit losses including individual large non-performing exposures.
Changes in sectoral and single name concentrations are tracked on
a\u00a0regular basis highlighting changes to risk concentration in the Group\u2019s
loan book. The Group allocates significant resources to ensure ongoing
monitoring and compliance with approved risk limits. Credit risk,
including compliance with key credit risk limits, is monitored monthly
and is periodically reported to senior management and to the Board
Risk Committee. Once an account has been placed on a watch list, the
exposure is carefully monitored and where appropriate, exposure
reductions are\u00a0effected.
As a matter of policy, non-retail facilities are subject to a review on, at
least, an annual basis, even when they are performing satisfactorily.
Annual review processes are supplemented by more frequent portfolio
and case review processes in addition to arrears or excess
management processes. Borrowers in Stage 2 may be subject to an
\u2018unlikely to pay\u2019 test at the time of annual review, or earlier, if there is a
material adverse change or event in their credit risk profile.
Through a range of forbearance solutions, as outlined on page 229, the
Group employs a dedicated approach to loan workout, monitoring and
proactive management of non-performing loans. A specialised recovery
function focuses on managing the majority of criticised loans and deals
with customers in default, collection or insolvency. Their mandate is to
support customers in\u00a0difficulty while maximising the return on non-
performing loans. Whilst the basic principles for managing weaknesses
in corporate, commercial and retail exposures are broadly similar, the
solutions reflect the differing nature of the assets. Further details on
forbearance are set out in section \u20182.1.6 - forbearance overview\u2019.
Credit risk mitigants (audited)
The perceived strength of a borrower\u2019s repayment capacity is
the\u00a0primary factor in granting a loan. However, the Group uses various
approaches to help mitigate risks relating to individual credits, including
transaction structure, collateral and guarantees. The main types of
collateral for loans and advances to customers are described under the
section on collateral. Credit policy and credit management standards
are controlled and set centrally by the Credit Risk function.
Occasionally, credit derivatives are purchased to hedge credit risk.
Current levels are modest and their use is subject to the normal credit
approval process.
The Group enters into netting agreements for derivatives with certain
counterparties, to ensure that in the event of default, all amounts
outstanding with those counterparties will be settled on a\u00a0net basis.
Depending on the size of the potential exposure derivative transactions
with wholesale counterparties are typically collateralised under a
Credit\u00a0Support Annex in conjunction with the International Swaps and
Derivatives Association (\u2018ISDA\u2019) Master Agreement.
2.1 Credit risk continued
Credit risk mitigants continued (audited)
Collateral (audited)
Credit risk mitigation may include a requirement to obtain collateral as
set out in the Group\u2019s lending policies. Where collateral and/or
guarantees are required, they are usually taken as a secondary source
of repayment in the event of a borrower\u2019s default. The Group maintains
policies which detail the acceptability of specific classes of collateral.
The principal collateral types for loans and advances are:
\u2022 Charges over business assets such as premises, inventory and
accounts receivable;
\u2022 Charges over other assets such as plant and machinery, marine
vessels etc.;
\u2022 Mortgage/legal charge over residential and commercial real estate;
and
\u2022 Charges over financial instruments such as debt securities
and\u00a0equities.
The nature and level of collateral required depends on a number of
factors such as the type of the credit facility, the term of the credit
facility and the amount of exposure. Collateral held as security for
financial assets, other than for loans and advances, is\u00a0determined by
the nature of the instrument. Debt securities and treasury products are
generally unsecured, with the exception of asset backed securities,
which are secured by a portfolio of financial assets.
Collateral is not usually held against loans and advances to banks,
including central banks, except where securities are held as part of
reverse repurchase or securities borrowing transactions or where a
collateral agreement has been entered into under a\u00a0master netting
agreement or where the bank purchases covered bonds as part of its
liquidity portfolio.
For non-mortgage/non-property lending, where collateral is taken, it will
typically include a charge over the business assets such as inventory
and accounts receivable. In some cases, a charge over property
collateral or a personal guarantee supported by a lien over personal
assets may also be taken. Where cash flows arising from the
realisation of collateral held are included in the expected credit loss
assessments, in many cases management rely on valuations or
business appraisals from independent external professionals.
Methodologies for valuing collateral (audited)
Details on the valuation rule methodologies applied and processes
used to assess the value of property assets taken as collateral are
described in the Group Property Valuation Policy and Property
Valuation Guidance. Both documents are subject to an annual review.
As property loans, including residential mortgages, represent
a\u00a0significant concentration within the Group\u2019s loans and advances to
customers portfolio, some key principles have been applied in respect
of the valuation of property collateral held by the Group.
The value of property collateral is assessed at loan origination and\u00a0at
certain stages throughout the credit lifecycle in accordance with the
Group Property Valuation Policy e.g. at annual review, where required.
In accordance with the Group Property Valuation Policy and guidelines,
the Group employs a number of methods to assist in reaching
appropriate valuations for property collateral held:
(a) External valuation firms on the Group\u2019s Valuers Panel, are engaged
by the Group to undertake valuations of immovable property
collateral in accordance with the rules set out in the Group Property
Valuation Policy.
(b) Independent professional internal valuations are completed in
limited circumstances (e.g. agricultural land) using a desktop
valuation approach by professionally qualified internal valuers who
are independent of the credit process in the second line of defence.
The assets being valued by this means must have an independent
professional external valuation completed within the past 3 years.
(c) Internal valuations are completed by the first line of defence
pursuant to the rules in the Property Valuation Policy and in line
with the Property Valuation Guidance, which provides appropriate
valuation methodology guidance. These include the following
valuation methodologies:
(i) Index valuation approach \u2013 used for residential property;
(ii) Comparable valuation approach \u2013 a basic level of valuation
methodology used to value agricultural land or as a sense check for
the valuation of residential, commercial or development land;
(iii) Commercial investment valuation approach \u2013 used for the valuation
of commercial property using the Group\u2019s commercial investment
yield matrices;
(iv) Residual valuation approach \u2013 used for the valuation of
development land or land with development potential; and
(v) Profits valuation approach \u2013 used for the valuation of trading assets
e.g. hotels, licensed premises, convenience stores etc. using the
Group\u2019s stabilised EBITDA matrices.
Collateral and ECLs (audited)
Applying one or a combination of the above methodologies, in line\u00a0with
the Group Property Valuation Policy, has resulted in an appropriate range
of discounts to original collateral valuations, influenced by the nature,
status and year of purchase of the asset. The frequency and availability
of such up-to-date valuations remain a key factor in ECL determination.
Additionally, relevant costs likely to be associated with the realisation of
the collateral are taken into account in the cash flow forecasts. The
spread of discounts is influenced by the type of collateral, e.g. land,
developed land or investment property and also its location.
The\u00a0valuation arrived at, is therefore, a function of the nature of\u00a0the asset.
When assessing the level of ECL allowance required for property loans,
apart from the value to be realised from the collateral, other cash flows,
such as recourse to other assets or sponsor support, are also
considered, where available. The other key driver is the time it takes to
receive the funds from the realisation of collateral. While this depends
on the type of collateral and the stage of its development, the period of
time to realisation is typically one to five years but sometimes this time
period is exceeded. These estimates are periodically reassessed on a
case by case basis.
When undertaking an ECL review for individually assessed cases that
have been deemed unlikely to pay, the present value of future cash
flows, including the value of collateral held, and the likely time required
to realise such collateral is estimated. An ECL allowance is raised for
the difference between this present value and the carrying value of the
loan. When multiple discounted cash flows are captured where the
gross credit exposure is \u2265 \u20ac 5 million (Republic of Ireland) or \u2265 \u00a3 5
million (UK) or cases in scope for the Group Leveraged Lending Policy,
the value of collateral is adjusted to reflect the impacts of up and
downside scenarios for these higher value exposures.
Securities financing (audited)
In addition to the credit risk mitigants, the Group, from time to time, enters
securities financing transactions. Securities financing consists of securities
borrowing transactions, reverse repurchase agreements and securities
sold under agreements to repurchase. At 31\u00a0December 2024, the total fair
value of the collateral received was \u20ac 6,643 million (2023: \u20ac 6,466 million)
in relation to reverse repurchase agreements and securities borrowing
transactions (note 19 to the consolidated financial statements).
Derivatives (audited)
Derivative financial instruments are recognised in the statement of
financial position at their fair value. Those with a positive fair value
are\u00a0reported as assets which at 31 December 2024 amounted to
\u20ac\u00a02,144 million (2023: \u20ac 2,377 million) and those with a negative fair
value are reported as liabilities which at 31 December 2024 amounted
to \u20ac1,807 million (2023: \u20ac 1,902 million).
The enforcement of netting agreements would potentially reduce the
statement of financial position carrying amount of derivative assets and
liabilities by \u20ac 1,385 million at 31 December 2024 (2023: \u20ac 1,556
million). The Group also has Credit Support Annexes (\u2018CSAs\u2019) in place
which provide collateral for derivative contracts. At 31 December 2024,\u00a0
\u20ac 698 million (2023: \u20ac 713 million) of CSAs are included within financial
assets as collateral for derivative liabilities and \u20ac 814 million (2023:
\u20ac\u00a0839 million) of CSAs are included within financial liabilities as
collateral for derivative assets (note 38 to the consolidated financial
statements). Additionally, the Group has agreements in place which
may allow it to net the termination values of cross currency swaps upon
occurrence of an event of default.
Risk transfer (audited)
The Group also uses other credit risk mitigation and protection
techniques such as credit risk transfers to optimise exposure to credit
risk and reduce potential credit losses associated with credit events,
such as defaults or downgrades in credit quality. At a portfolio level,
credit risk is accessed in relation to the degree of single name, sectoral
asset class and geographic concentrations. In order to manage credit
risk exposure in the event of emerging risk concentrations, the risk
capital implications are assessed and, where appropriate, risk transfer
options (e.g. loan disposals, securitisations etc.) are considered.
In November 2024, the Group entered into a Significant Risk Transfer
(\u2018SRT\u2019) on a portfolio of \u20ac 1 billion corporate loan assets. This
transaction reduces the Group\u2019s credit risk exposure, and consequently
the risk weighted assets on the reference portfolio of loan assets,
through a risk sharing structure whereby the buyers of the notes
assume the credit risk for \u20ac 97.5 million of potential credit losses on the
reference portfolio of loan assets in return for an annual coupon.
No assets were derecognised from the Group\u2019s balance sheet. The
reference portfolio of loan assets and related customer relationships
continue to be maintained by the Group.
Measurement, methodologies and judgements
Introduction (audited)
The Group has set out the methodologies used and judgements
exercised in determining its expected credit loss allowance for the year
to 31 December 2024.
The Group, in estimating its ECL allowance does so in line with the
expected credit loss impairment model as set out by the International
Financial Reporting Standard 9 Financial Instruments (\u2018the standard\u2019).
This model requires a timely recognition of ECL across the Group.
The\u00a0standard does not prescribe specific approaches to be used in
estimating ECL allowance, but stresses that the approach must reflect
the following:
\u2022 An unbiased and probability weighted amount that is determined by
evaluating a range of possible outcomes;
\u2022 Underlying models should be point in time and forward looking \u2013
recognising economic conditions;
\u2022 The ECL must reflect the time value of money;
\u2022 A lifetime ECL is calculated for financial assets in Stages 2 and 3 and
Purchased or Originated Credit Impaired (\u2018POCI\u2019); and
\u2022 The ECL calculation must incorporate reasonable and supportable
information that is available without undue cost or effort at the
reporting date about past events, current conditions and forecasts of
future economic conditions.
The standard defines credit loss as the difference between all
contractual cash flows that are due to an entity in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all
cash shortfalls), discounted at the original effective interest rate (\u2018EIR\u2019)
or an approximation thereof.
ECLs are defined in the standard as the weighted average of credit
losses across multiple macroeconomic scenarios, with weights
assigned based on the probability of each scenario occurring and are
an estimate of credit losses over the life of a\u00a0financial instrument.
The ECL model applies to financial instruments measured at amortised
cost or at fair value through other comprehensive income. In addition,
the ECL approach applies to lease receivables, loan commitments and
financial guarantee contracts that are not measured at fair value
through profit or loss.
A key principle of the ECL model is to reflect any relative deterioration or
improvement in the credit quality of financial instruments occurring (e.g.
change in the risk of a default). The\u00a0ECL amount recognised as a loss
allowance or provision depends on the extent of credit deterioration since
initial recognition together with the impact on credit risk parameters.
Bases of measurement (audited)
Under the standard, there are two measurement bases:
1. 12-month ECL (Stage 1), which applies to all financial instruments
from initial recognition as long as there has been no significant
increase in credit risk; and
2. Lifetime ECL (Stages 2 and 3 and POCI), which applies when a
significant increase in credit risk has been identified on an account
(Stage 2), an account has been identified as being credit-impaired
(Stage 3) or when an account meets the POCI\u00a0criteria.
Staging (audited)
Financial assets are allocated to stages dependent on credit quality
relative to when assets were originated. A financial asset, including
financial assets acquired by the Group, can only originate in either
Stage 1 or POCI.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Credit risk at origination (audited)
Credit risk at origination (\u2018CRAO\u2019) is a key input into the staging allocation
process. The origination date of an account is determined by the date on
which the Group became irrevocably committed to the contractual
obligation and the account was first graded on an appropriate model.
For undrawn credit facilities, the Group uses the date of origination as the
date when it becomes party to the irrevocably contractual arrangements
or irrevocable commitment. For overdrafts which have both drawn and
undrawn components, the date of origination is the same for both. The
Group uses best available information for facilities which originated
prior to a credit risk rating model or scorecard being in\u00a0place.
For accounts that originated prior to 1 January 2018, a neutral view of
the macroeconomic outlook at the time is used, i.e. where
macroeconomic variables are used in the Lifetime PD models, long-run
averages are used instead of historical forecasts.
Stage 1 characteristics (audited)
Obligations are classified Stage 1 at origination or at acquisition by the
Group, unless POCI, with a 12 month ECL being recognised. These
obligations remain in Stage 1 unless there has been a significant
increase in credit risk.
Accounts can also return to Stage 1 if they no longer meet either the
Stage 2 or Stage 3 criteria, subject to satisfaction of the appropriate
probation periods, in line with regulatory requirements.
Stage 2 characteristics (audited)
Obligations where there has been a \u2018significant increase in credit
risk\u2019 (\u2018SICR\u2019) since initial recognition but do not have objective evidence
of credit impairment are classified as Stage 2. For these assets, lifetime
ECLs are recognised.
The Group assesses at each reporting date whether a significant
increase in credit risk has occurred on its financial obligations since their
initial recognition. This assessment is performed on individual
obligations rather than at a portfolio level. If the increase is considered
significant, the obligation will be allocated to Stage 2 and a lifetime
expected credit loss will apply to the obligation. If the change is not
considered significant, a 12 month expected credit loss will continue to
apply and the obligation will remain in Stage 1.
SICR assessment (audited)
The Group\u2019s SICR assessment is determined based on both
quantitative and qualitative measures:
Quantitative measure: This measure reflects an arithmetic assessment
of the change in credit risk arising from changes in the probability of
default. The Group compares each obligation\u2019s annualised average
probability weighted residual origination lifetime probability of default
(\u2018LTPD\u2019) (see \u2018Credit risk at origination\u2019 above) to its current estimated
annualised average probability weighted residual LTPD at the reporting
date. If the difference between these two LTPDs meets the quantitative
definition of SICR, the Group transfers the financial obligation
into\u00a0Stage 2. Increases in LTPD may be due to credit deterioration of
the individual obligation or due to macroeconomic factors or
a\u00a0combination of both. The Group has determined that an account had
met the quantitative measure if the average residual LTPD at\u00a0the
reporting date was at least double the average residual LTPD at
origination, and the difference between the LTPDs was at least 50bps
or 85bps in the case of residential mortgages. The appropriateness of
this threshold is kept under review by the\u00a0Group.
Qualitative measure: This measure reflects the assessment of the
change in credit risk based on the Group\u2019s credit management and the
individual characteristics of the financial asset. This is not model driven
and seeks to capture any change in credit quality that may not be
already captured by the quantitative criteria.
The qualitative assessment reflects pro-active credit management
including monitoring of account activity on an individual or portfolio
level, knowledge of client behaviour, and cognisance of industry and
economic trends.
The criteria for this qualitative trigger include, for example:
\u2022 A downgrade to watch grade of the borrower\u2019s/facility\u2019s credit grade
reflecting the increased credit management focus on these accounts;
and/or
\u2022 Forbearance has been provided and the account is within the
probationary period.
\u2022 Lender assessed SICR triggers: For non-retail portfolios, a suite of
lender assessed triggers are in place to ensure appropriate and
timely identification of increased credit risk, which when occur, trigger
a SICR event.
The criteria for this lender assessed trigger include, for example:
\u2022 A post distressed restructure payment default occurs where the
borrower is neither in default nor forborne;
\u2022 A material adverse event has occurred for the borrower which may
impact the borrower\u2019s ability to repay such as: adverse publicity
which raises concerns over the viability of a business; loss of key
personnel (CEO/CFO/COO) which raises concerns over the strategy/
viability of the business or significant negative macroeconomic
events (including but not limited to economic or market volatility,
changes in legislation and technological threats to an industry,
changes in access to markets) where the financial impact to the
borrower is deemed material.
\u2022 Backstop indicators: The Group has adopted the rebuttable
presumption within IFRS 9 that loans greater than 30 days past due
represent a significant increase in credit risk.
Where SICR criteria are no longer a trigger, the account can exit Stage
2 and return to Stage 1.
Stage 3 characteristics (audited)
Defaulted loans (with the exception of newly originated or acquired
loans that are in Stage 1 or POCI) are classed as credit impaired and
allocated to Stage 3. Where default criteria are no longer met, the
borrower exits Stage 3 subject to a probation period, in line with
regulatory requirements.
The key criteria resulting in a classification of default are:
\u2022 Where the Group considers a borrower to be unlikely to pay their
loans in full without realisation of collateral, regardless of the
existence of any past-due amount; or
\u2022 The borrower is 90 days or more past due on any material loan (day
count starts when any material amount of principal, interest or fee
has not been paid by a borrower at the date it was due).
Identification of non-performing exposures and unlikeliness to pay are
included in the Group\u2019s Definition of Default and Credit Impairment Policy.
Purchased or originated credit impaired (\u2018POCI\u2019) (audited)
POCIs are assets originated credit impaired and have a discount to the
contractual value when measured at fair value. The Group uses an
appropriate discount rate for measuring ECL in the case of POCIs which
is the credit-adjusted effective interest rate. This rate is used to discount
the expected cash flows of such assets to fair value on initial recognition.
POCI obligations remain outside of the normal stage allocation process
for the lifetime of the obligation. The ECL for POCI obligations is always
measured at an amount equal to lifetime expected credit losses. The
amount recognised as a loss allowance for these assets is the
cumulative change in lifetime expected credit losses since the initial
recognition of the assets rather than the total amount of lifetime
expected credit losses.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Measurement of expected credit loss (audited)
The measurement of ECL is estimated through one of the following
approaches:
(i) Standard approach: This approach is used for the majority of
exposures where each ECL input parameter (Probability of Default
\u2013 PD, Loss Given Default \u2013 LGD, Exposure at Default \u2013 EAD, and
Prepayments \u2013 PP) is developed in line with standard modelling
methodology. The Group\u2019s IFRS 9 models have been developed
and approved in line with the Group\u2019s Model Risk Management
Framework.
(ii) Simplified approach: For portfolios not on the standard approach,
the Group has followed a simplified approach. This approach
consists of applying portfolio level ECL averages, drawn from
similar portfolios, where it is not possible to estimate individual
parameters. These generally relate to portfolios where specific
IFRS 9 models have not been developed due to immateriality, low
volumes or where there are no underlying grading models. As
granular PDs are not available for these portfolios, a non-standard
approach to staging is required with reliance on the qualitative
criteria (along with the 30 days past due back-stop).
(iii) Discounted cash-flows (\u2018DCFs\u2019): Assets are grouped together and
modelled based on asset classification and sector with the
exception of those Stage 3 assets where a DCF is used. DCFs are
used as an input to the ECL calculation for Stage 3 credit impaired
exposures where gross credit exposure is \u2265 \u20ac 1 million (Republic of
Ireland) or \u2265 \u00a3 500,000 (UK). Multiple DCFs are captured where
gross credit exposure is \u2265 \u20ac 5 million (Republic of Ireland) or \u2265
\u00a3\u00a05\u00a0million (UK) or cases in scope for the Group Leveraged Lending
Policy, to reflect the case specific impacts of up and downside
scenarios for these higher value exposures.
Collateral valuations and the estimated time to realisation of
collateral is a key component of the DCF model. The Group
incorporates forward looking information in the assessment
of\u00a0individual borrowers through the credit assessment process.
Where a single DCF is utilised this assessment produces a\u00a0base
case ECL. This is then adjusted to incorporate the impact of
multiple scenarios on the base ECL, by using a proportional uplift
obtained from ECL modelled sensitivities in the same/similar
portfolio. Where a range of scenarios are captured through multiple
DCFs these are probability weighted to produce the final ECL. An
adjustment is made for cases with\u00a0a very low final ECL to ensure a
minimum level of ECL is maintained, this is derived through
reference to ECL model\u00a0outputs.
(iv) Management judgement: Where the estimate of ECL does not
adequately capture all available forward looking information about
the range of possible outcomes, or where there is a significant
degree of uncertainty, management judgement may be considered
appropriate for an adjustment to ECL. The management adjustment
must consider all relevant and supportable information, including
but not limited to, historical data analysis, predictive modelling and
management experience. The methodology to incorporate the
adjustment should consider the degree of any relevant over
collateralisation (headroom) and should not result in a zero overall
ECL unless there is sufficient headroom to support this. The key
judgements in the 2024 year end ECL estimates are outlined on
pages 200 and 201.
Effective interest rate (audited)
The ECL must incorporate the time value of money discounted to the
reporting date using the effective interest rate (\u2018EIR\u2019) determined at
initial recognition or an approximation thereof.
\u2022 The Group uses an approximation approach based on the account
level interest rate when calculating ECL which is applied to both
drawn and undrawn commitments.
\u2022 This approach is subject to an annual assessment that all
approximations remain appropriate and do not result in a\u00a0material
misstatement of the ECL.
\u2022 The Group has tested the appropriateness of using current interest
rates as an approximation for the discount rates required for
measuring ECLs. This testing determined that using the current
interest rates as the discount rates is an appropriate approximation.
Policy elections and simplifications
Low credit risk exemption (audited)
The Group utilises practical expedients, as allowed by IFRS 9, for the
stage allocation of particular financial instruments which are deemed
\u2018low credit risk\u2019. This practical expedient permits the Group to assume,
without more detailed analysis, that the credit risk on a financial
instrument has not increased significantly since initial recognition if the
financial instrument is determined to have \u2018low credit risk\u2019 at the
reporting date. The Group allocates such assets to Stage 1.
Under IFRS 9, the credit risk on a financial instrument is considered low\u00a0if:
\u2022 the financial instrument has a low risk of default;
\u2022 the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term; and
\u2022 adverse changes in economic business conditions in the longer term
may, (but will not necessarily) reduce the ability of the borrower to
fulfil its contractual cash flow obligations.
This low credit risk exemption is applied to particular assets within the
Treasury Debt Securities Portfolio, Capital Markets Collateralised Loan
Obligation Bonds and for Loans and Receivables to Banks, specifically
assets which have an internal grade equivalent to an external
investment grade rating (BBB-) or\u00a0higher.
The Group applies a quantitative backstop trigger of tripling of probability
of default subject to a minimum threshold movement of 30bps to
determine whether assets subject to the low credit risk exemption should
be allocated to Stage 2. Additionally, if any of such assets are on a watch
list based on agreed criteria, they are allocated to Stage 2.
Short term cash (audited)
The Group\u2019s IFRS 9 Impairment Policy does not require calculation of
an ECL for short term cash at central banks and other banks which
have a low risk of default with a very low risk profile. The calculation of
the ECL at each reporting date would be immaterial given these
exposures\u2019 short term nature and their daily management.
Lease receivables and trade receivables (audited)
For lease receivables, the Group has elected to use its standard
approach for both stage allocation and the ECL calculation and has
elected to use an expedient (simplified approach) for trade\u00a0receivables.
IFRS 9 ECL Credit Risk models (audited)
The IFRS 9 ECL models provide the risk parameters which are the
inputs into the model driven estimate of ECL which is used across all
Stage 1 and Stage 2 assets plus all non-DCF Stage 3 exposures on the
standard approach to ECL.
IFRS 9 Portfolio Delineation (audited)
The IFRS 9 models are delineated into retail and non-retail portfolios.
The retail IFRS 9 portfolios provide exposure level risk parameter
estimates which take into account borrower level characteristics and
metrics where appropriate, whilst the non-retail portfolios provide
metrics which are either borrower or connection level estimates.
Probability of default (audited)
Probability of default (\u2018PD\u2019) is the likelihood that an account or borrower
defaults over an observation period, given that they are not currently in
default, for each year of the expected contractual lifetime of the
exposure. The PD is a point in time estimate which is reflective of the
current and expected economic conditions.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Probability of default continued (audited)
In order to capture the appropriate risk dynamics across the lifetime of
the exposure the development process considers:
\u2022 Macroeconomic effects captured through factors such as
unemployment rate and GDP;
\u2022 Cross-sectional risk discriminators in particular the internal rating
model outputs plus other factors such as forbearance and\u00a0days past
due; and
\u2022 Seasoning factors such as product type, delinquency and
forbearance status.
Loss given default (audited)
Loss given default (\u2018LGD\u2019) is a current assessment of the amount that
will not be recovered in the event of default, taking account of future
conditions. It can be thought of as the difference between the amount
owed to the Group (i.e. the exposure) and the net present value of
future cash flows less any relevant costs expected to be incurred in the
recovery process. If an account returns to performing from default
(excluding any loss making concession) or if the discounted post-
default recoveries are equal to or greater than the exposure, the
realised loss is zero.
The LGD modelling approach depends on whether the facility has
underlying security and, if so, the nature of that security. The following
sets out the general approaches for the retail and non-retail portfolios:
\u2013 Retail portfolios
For unsecured loans, a cash flow curve, which estimates the
cumulative cash received following default until the loan is written-
off or returns to performing, is used to estimate the future recovery
amount. This is discounted at the effective interest rate and
compared to the current outstanding balance. Any shortfall between
the recovery amount and the outstanding balance is the LGD used
to estimate ECL. Where appropriate, this may then be adjusted to
reflect economic conditions.
For secured loans the following may be considered:
\u2022 The value of underlying collateral is estimated at the forecasted
time of disposal (taking into account forecasted market price
growth/falls and haircuts on market values that are expected at the
date of sale plus associated costs) in order to calculate the future
recovery amount;
\u2022 The potential for the exposure to be deleveraged through a portfolio
sale taking into account the costs associated with same; and
\u2022 Paths for returning to the performing portfolios such as
forbearance and self-cure.
\u2013 Non-retail portfolios
For unsecured loans, characteristics such as borrower sector and
nature of collateral linked to affiliated accounts under the same
customer group are used to determine future losses based on
historical experience of discounted recoveries.
For secured loans, the value of the underlying property collateral is
estimated at the reporting date. This is used to estimate the ECL
based on historical experience of discounted recoveries.
Exposure at default (audited)
Exposure at default (\u2018EAD\u2019) is defined as the exposure amount that
will\u00a0be owed by a customer at the time of default. This will comprise
changes in the exposure amount between the reporting date and the
date that the customer defaults. This may be due to repayments,
interest and fees charged and additional drawdowns by the customer.
Prepayments (audited)
For term credit products, prepayment occurs where a customer fully
prepays an account prior to the end of its contractual term.
For\u00a0revolving credit products, \u2018prepayment\u2019 is defined as the cessation
of use and withdrawal of the facility provided that the account was not
in default prior to closure.
Prepayment is used in the lifetime ECL calculation for Stage 2 loans to
account for the proportion of the facilities/customers that prepay each\u00a0year.
Determining the period over which to measure ECL (audited)
Both the origination date and the expected maturity of a facility must be
determined for ECL purposes. The origination date is used to measure
credit risk at origination.
The expected maturity is used for assets in Stage 2, where the ECL
must be estimated over the remaining life of the facility.
The expected maturity approach is:
\u2022 Term credit products: the contractual maturity date, with exposure
and survival probability adjusted to reflect behaviour i.e. amortisation
and prepayment;
\u2022 Revolving credit products: the period may extend beyond the
contractual period over which the Group is exposed to credit risk,
e.g. overdrafts and credit cards. The Group\u2019s approach is to use a
modelled behavioural life estimate for these obligations for ECL
calculation purposes.
Forward looking indicators in the models (audited)
For ECL calculations reliant on models in the standard and simplified
approaches, forward looking indicators are incorporated into the models
through the use of macroeconomic variables. These have been identified
statistically as the key macroeconomic variables that drive the parameter
being assessed (e.g. PD or LGD). The final model structure incorporates
these as inputs with the 12 month and lifetime calculations utilising the
macroeconomic forecasts for each scenario. See the \u2018macroeconomic
scenarios and weightings\u2019 section for more detail on the process for
generating scenarios and associated key macroeconomic factors relevant
for\u00a0the models. In circumstances where there is a risk that the modelled
output fails to capture the appropriate response to changes in the
macroeconomic environment such as inflation and interest rate changes,
these risks are captured through the use of post model adjustments.
Write-offs (audited)
When the prospects of recovering a loan, either partially or fully, do not
improve, a point may come when it will be concluded that as there is no
realistic prospect of recovery, the loan and any related ECL will be
written-off. The Group determines, based on\u00a0specific criteria, the point
at which there is no reasonable expectation of recovery. When the
following criteria exist (or comparable circumstances arise), the loan
can be subject to a\u00a0partial or full write-off:
\u2022 A decision has been taken to enforce on a loan, due to no agreement
with the customer for a restructure/settlement and all customer
engagement with the Group regarding their loan agreement has ceased;
\u2022 Inception of informal insolvency proceedings has commenced or is
about to commence;
\u2022 Receivership or other formal recovery action (e.g. where expectation
of recovery of collateral is expected through enforcement activity but
no additional recoveries above the collateral value are anticipated)
has commenced or is about to commence; and
\u2022 A loan is substantially provided for or no material repayments have
been received for a period of time (minimum 12 months) and all
customer engagement with the Group regarding their loan
agreement has ceased.
Debt forgiveness may subsequently arise where there is a formal
contract with the customer for the write-off of the loan. In addition,
certain forbearance solutions and restructuring agreements may include
an element of debt write down (debt forgiveness). Further details on
forbearance are set out in section \u20182.1.6 - forbearance overview\u2019.
The contractual amount outstanding of loans written-off during the year
that are still subject to enforcement activity are outlined on page 218 and
relate to non-contracted write-offs, both full and partial. The Group
recognises cash received from the customer in excess of the carrying
value of the loan after a non-contracted write-off as \u2018recoveries of
amounts previously written-off\u2019 in the income statement.
Sensitivities (audited)
The Group\u2019s estimates of expected credit losses are responsive
to\u00a0varying economic conditions and forward looking information. These
estimates are driven by the relationship between historic experienced
loss and the combination of macroeconomic variables. Given the co-
relationship of each of the macroeconomic variables to one another
and the fact that loss estimates do not follow a linear path, a sensitivity
to any single economic variable is not meaningful. As such, the
following sensitivities provide an indication of ECL movements that
include changes in model estimates and quantitative SICR staging
assignments, with a single 100% weighting applied individually.
Increased sensitivity for the Downside 2 \u2018Credit crunch\u2019 scenario is
evident in the 2024 sensitivities compared to the Reported ECL and
100% Base, driven predominantly by underlying model and staging
sensitivities (including the redeveloped corporate models and an
element of macro sensitive PMA allocation where relevant). Further
details on post model adjustments are outlined on pages 200 and 201.
Relative to the Base scenario, in the 100% Downside \u2018Geopolitical
tensions\u2019 and \u2018Credit crunch\u2019 scenarios, the ECL allowance increases
by\u00a030% and 64%, respectively. In the 100% Upside scenario, the ECL
allowance declines by 6%. At 31\u00a0December 2024, a 100% Downside
\u2018Geopolitical tensions\u2019 and \u2018Credit crunch\u2019 scenario sees a higher ECL
allowance sensitivity of \u20ac 373 million and \u20ac 794 million respectively
compared to Base (\u20ac\u00a0214 million and \u20ac 635 million respectively
compared to the Reported ECL). Lower relative impacts are observed
for the\u00a0AIB\u00a0UK\u00a0portfolio.
ECL allowance at 31 December 2024
Reported
100% Base
100% Downside
Scenario 1
(\u2018Geopolitical
tensions\u2019)
100% Downside
Scenario 2
(\u2018Credit crunch\u2019)
100% Upside
Scenario
(\u2018Quick recovery\u2019)
Loans and advances to customers (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Residential mortgages
270
241
304
464
223
Other personal
137
128
145
167
124
Property and construction
464
410
569
689
384
Non-property business
473
415
535
636
393
Total
1,344
1,194
1,553
1,956
1,124
Off-balance sheet loan commitments
44
36
46
60
34
Financial guarantee contracts
13
12
16
20
12
1,401
1,242
1,615
2,036
1,170
Of which:
AIB UK segment
174
160
192
206
151
ECL allowance at 31 December 2023
Reported
100% Base
100% Downside
Scenario 1
(\u2018Persistent
inflation\u2019)
100% Downside
Scenario 2
(\u2018Credit crunch\u2019)
100% Upside
Scenario
(\u2018Quick recovery\u2019)
Loans and advances to customers (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Residential mortgages
309
291
329
540
262
Other personal
97
94
98
119
90
Property and construction
541
501
567
796
433
Non-property business
573
543
618
749
490
Total
1,520
1,429
1,612
2,204
1,275
Off-balance sheet loan commitments
43
37
44
65
32
Financial guarantee contracts
16
16
17
26
15
1,579
1,482
1,673
2,295
1,322
Of which:
AIB UK segment
221
214
232
233
208
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Post model adjustments (\u2018PMAs\u2019) (audited)
Post model adjustments (\u2018PMAs\u2019) are applied where management
believe that they are necessary to ensure an adequate level of ECL
provision and to address known model limitations and/or novel risks not
captured in the models. They may also be used where models are
being redeveloped but are not yet deployed, where the impact of
introducing the new models can be accurately quantified.
PMAs are approved through the ECL governance process within which
the appropriateness of PMAs is considered against the backdrop of the
risk profile of the loan book, recent loss history or changes in
underlying resolution strategies not captured in the models and
management\u2019s view of novel risks. Release of PMAs will occur as new
models are deployed or where the risk has been judged by
management to be captured in the modelled outcomes, or to have
passed.
The PMAs approved for 31 December 2024 (and 2023 comparison),
are set out below and are categorised as follows:
\u2022 NPE resolution \u2013 ECL adjustments where the current model does
not take into account downside risks that should be incorporated into
the final loss estimate.
\u2022 Sectoral/Emerging risks \u2013 ECL adjustments which reflect novel
risks within a sector or portfolio for which there has not been time to
embed an adjustment within the related models or where the models
are incapable of differentiating the nuanced sectoral impacts of each
novel risk.
\u2022 Future model developments/Other \u2013 ECL adjustments required
where the impact of upcoming model changes or recalibrations
is\u00a0known with sufficient accuracy and ECL\u00a0adjustments where it was
judged that an amendment to the\u00a0modelled ECL was required for
reasons other than the above.
2024
Post model adjustments
(audited)
ECL allowance
before PMAs
NPE resolution
Sectoral/
Emerging risks
Future model
developments/
Other1
Total PMAs
Total ECL
allowance
Proportion of
PMAs to total
ECL allowance
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
%
Residential mortgages
222
48
\u2014
\u2014
48
270
18
Other personal
125
12
\u2014
\u2014
12
137
9
Property and construction
234
76
60
94
230
464
50
Non-property business
410
6
3
54
63
473
13
Total loans and advances to
customers
991
142
63
148
353
1,344
26
Loan commitments and
financial guarantees issued
57
\u2014
\u2014
\u2014
\u2014
57
\u2014
Total ECL allowance
1,048
142
63
148
353
1,401
25
2023
Post model adjustments
(audited)
ECL allowance
before PMAs
NPE resolution
Sectoral/
Emerging risks
Future model
developments/
Other1
Total PMAs
Total ECL
allowance
Proportion of
PMAs to total
ECL allowance
\u20ac m\u00a0 \u00a0
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
%
Residential mortgages
229
58
22
\u2014
80
309
26
Other personal
97
\u2014
\u2014
\u2014
\u2014
97
\u2014
Property and construction
259
113
149
20
282
541
52
Non-property business
401
29
15
128
172
573
30
Total loans and advances to
customers
986
200
186
148
534
1,520
35
Loan commitments and
financial guarantees issued
59
\u2014
\u2014
\u2014
\u2014
59
\u2014
Total ECL allowance
1,045
200
186
148
534
1,579
34
1. The Capital Markets non-property business PMA of \u20ac 34 million at 31 December 2024 has been recategorised from 'Sectoral/Emerging risks' to 'Future model
development/Other' and the 31 December 2023 comparative (\u20ac 47 million) has also been re-presented to reflect this change.
NPE resolution (audited)
A PMA of \u20ac 58 million was implemented at 31 December 2023 on
Stage\u00a03 mortgages, primarily to address potential ECL underestimation
from higher yields\u00a0in the current interest rate environment impacting
portfolio sale assumptions within the mortgage model and uncertainty
of the timing to transact\u00a0NPE mortgage portfolio sales. During 2024,
\u20ac10 million of this PMA was released due to the deployment of model
enhancements and a reduction in interest rates versus the\u00a0original
PMA, with \u20ac 48 million retained at 31\u00a0December 2024.
Within the Retail Banking personal lending Stage 3 portfolio, a new
PMA of \u20ac\u00a012\u00a0million was introduced at 31 December 2024 to reflect the
experience of recent loan sale transactions for similar portfolios not
currently captured in the modelled outcomes.
PMAs relating to non-performing property (\u20ac\u00a076\u00a0million) and
non\u2011property business (\u20ac 6 million) loans reflect an adjustment to
account for latent risks, idiosyncratic concentration risk, and alternative
resolution strategies, such as NPE portfolio loan sales. This PMA is to
address the potential range of ECL outcomes depending on the
ultimate resolution type. At\u00a031 December 2024, this PMA reflects the
potential reduction in asset values, particularly within commercial real
estate and potential impacts from NPE portfolio loan sales. There has
been a partial unwind of this PMA in the year where the risk has now
been captured through an update to\u00a0valuations or where borrowings
have been repaid. This PMA is expected to unwind over time as
Stage\u00a03 property cases are resolved and the property market
uncertainty reduces.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Sectoral/Emerging risks (audited)
At 31 December 2024, previous PMAs in this category relating to
inflationary pressures / cost of living have been largely unwound and
are now reflected in the modelled outcomes. This also applies to risks
relating to higher interest rates which have eased, with portfolio
performance remaining strong at current levels. However, a new PMA
of \u20ac 56 million was introduced to address model and novel risks and
specifically relates to the latent risk of potential forbearance activity.
This PMA predominately relates to the commercial real estate Stage 2
portfolio.
Within AIB UK, a PMA of \u20ac 7 million (\u20ac 1 million non-property business
and \u20ac 6 million property) is in place to reflect the full expected impact of
the external environment, including interest rate and property market
dynamics. This PMA has reduced in the year as the risks have been
captured in the modelled outcomes or assessed to have moderated.
Future model developments/Other (audited)
Within the Capital Markets property portfolio, the recalibrated
investment property model scheduled for deployment in the first half of
2025 is expected to result in additional exposures migrating to Stage 2.
At 31 December 2024, a new PMA of \u20ac 90 million was introduced to
reflect the potential increase in Stage 2 balances and associated ECL
levels. This PMA also includes the impact of a staging adjustment to
transfer \u20ac 0.2 billion of Stage 1 loans to Stage 2. This PMA will unwind
over the 12 months post implementation, as cases are regraded and
migrate to Stage 2 as appropriate.
The Capital Markets non-property business PMA (\u20ac 34 million)
continues to reflect the potential impact of inflation (including higher
energy costs), high interest rates on non-property business, and an
assessment that the modelled probabilities of default do not fully
capture the expected credit losses. The PMA has been retained at a
reduced level for 31 December 2024 reflecting resilient performance of
the underlying portfolios and implementation of the recalibrated IFRS 9
models which better capture the underlying risk. This PMA adjustment
has been reclassified in the year from 'Sectoral/Emerging risks' to
'Future model developments/Other' as this PMA is expected to unwind
further in the second half of 2025 if satisfactory performance continues
and as cases are regraded on the recalibrated models. \u00a0
For the Syndicated and International Finance (\u2018SIF\u2019) portfolio in Capital
Markets, it was previously determined that historically observed
relationships between default rates and macroeconomic factors in the
modelled probabilities of default do not fully capture the expected credit
losses and therefore needed to be increased for this portfolio. The PMA
has been retained at a reduced level for 31 December 2024 at \u20ac 11
million reflecting the implementation of the recalibrated IFRS 9 models.
This PMA is expected to unwind further in the second half of 2025 if
satisfactory performance continues and all elements of the updated
models are fully deployed.
Within AIB UK, a PMA of \u20ac 8 million has been retained at 31 December
2024 and relates to AIB Group\u2019s decision to continue its exit strategy in
respect of a cohort of legacy loans.
Other PMAs amounting to a further \u20ac 5 million in this category are not
individually significant.
2023
Statement of financial position
Maximum Exposure
Maximum exposure to credit risk (audited)
Exposure
ECL
allowance
Carrying
amount
Amortised
cost
Fair value
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cash and balances at central banks
38,018
\u2014
38,018
1
37,420
\u2014
37,420
1
Derivative financial instruments
2,377
\u2014
2,377
\u2014
2,377
2,377
Loans and advances to banks
1,329
\u2014
1,329
1,329
\u2014
1,329
Loans and advances to customers
67,011
(1,520)
65,491
65,449
42
65,491
Securities financing
6,467
(1)
6,466
6,466
\u2014
6,466
Investment securities2
17,001
(3)
16,998
4,510
12,488
16,998
Trading portfolio financial assets
93
\u2014
93
\u2014
93
93
Included elsewhere:
Trade receivables
102
(1)
101
101
\u2014
101
Items in course of collection
42
\u2014
42
42
\u2014
42
Accrued interest
396
\u2014
396
396
\u2014
396
132,836
(1,525)
131,311
115,713
15,000
130,713
Loan commitments and other credit
related commitments
16,136
(43)
(43)
16,136
\u2014
16,136
Financial guarantees
857
(16)
(16)
857
\u2014
857
16,993
3
(59)
(59)
16,993
\u2014
16,993
Total
149,829
(1,584)
131,252
132,706
15,000
147,706
1. Comprises balances at central banks of \u20ac 37,420 million and other cash on hand of \u20ac 598 million.
2. Excluding equity shares of \u20ac 355 million.
3. Comprises off-balance sheet instruments.
Internal credit grade profile by ECL staging (audited)
The table below analyses the internal credit grading profile by ECL staging for the Group\u2019s loans and advances to customers at 31 December 2024
and 2023:
Amortised cost (audited)
2024
2023
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Total
Strong
45,774
2,593
\u2014
40
48,407
44,273
2,808
\u2014
15
47,096
Satisfactory
14,598
2,706
\u2014
14
17,318
12,014
2,697
\u2014
6
14,717
Total strong/satisfactory
60,372
5,299
\u2014
54
65,725
56,287
5,505
\u2014
21
61,813
Criticised watch
728
1,828
\u2014
10
2,566
919
1,473
\u2014
5
2,397
Criticised recovery
18
847
\u2014
10
875
44
694
\u2014
40
778
Total criticised
746
2,675
\u2014
20
3,441
963
2,167
\u2014
45
3,175
Non-performing
1
\u2014
1,889
113
2,003
2
\u2014
1,923
56
1,981
Gross carrying amount
61,119
7,974
1,889
187
71,169
57,252
7,672
1,923
122
66,969
ECL allowance
(184)
(524)
(648)
12
(1,344)
(254)
(635)
(634)
3
(1,520)
Carrying amount
60,935
7,450
1,241
199
69,825
56,998
7,037
1,289
125
65,449
Gross loans1 and ECL movements (audited)
The following tables set out the movements in the gross carrying amount and ECL allowance for loans and advances to customers at amortised
cost by ECL staging between 1 January 2024 and 31 December 2024 and the corresponding movements between 1 January 2023 and
31\u00a0December 2023.
Accounts that triggered movements between Stage 1 and Stage 2 as a result of failing/curing a quantitative measure only (as disclosed on
page\u00a0191) and that subsequently reverted within the year to their original stage, are excluded from \u2018Transferred from Stage 1 to Stage 2\u2019
and\u00a0\u2018Transferred from Stage 2 to Stage 1\u2019. The Group believes this presentation aids the understanding of the underlying credit migration.
Gross carrying amount movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
57,252
7,672
1,923
122
66,969
Transferred from Stage 1 to Stage 2
(6,290)
6,290
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,509
(4,509)
\u2014
\u2014
\u2014
Transferred to Stage 3
(149)
(907)
1,056
\u2014
\u2014
Transferred from Stage 3
29
217
(246)
\u2014
\u2014
New loans originated/top-ups
15,898
\u2014
\u2014
88
15,986
Redemptions/repayments
(11,842)
(2,704)
(765)
(31)
(15,342)
Interest credited
2,863
469
89
5
3,426
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(264)
(112)
(81)
\u2014
(457)
Exchange translation adjustments
530
49
15
1
595
Impact of model, parameter and overlay changes
(1,499)
1,499
\u2014
\u2014
\u2014
Other movements
82
10
24
2
118
At 31 December
61,119
7,974
1,889
187
71,169
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
52,862
6,036
1,997
87
60,982
Transferred from Stage 1 to Stage 2
(7,377)
7,377
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,518
(4,518)
\u2014
\u2014
\u2014
Transferred to Stage 3
(125)
(1,070)
1,195
\u2014
\u2014
Transferred from Stage 3
47
262
(309)
\u2014
\u2014
New loans originated/top-ups
17,186
\u2014
\u2014
36
17,222
Redemptions/repayments
(11,266)
(1,895)
(579)
(10)
(13,750)
Interest credited
2,426
419
80
3
2,928
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(47)
(43)
(316)
\u2014
(406)
Exchange translation adjustments
74
21
6
\u2014
101
Impact of model, parameter and overlay changes
(1,082)
1,082
\u2014
\u2014
\u2014
Other movements
36
1
(26)
6
17
At 31 December
57,252
7,672
1,923
122
66,969
1. The gross carrying amount movement is recorded at each month end with movements calculated versus the position at previous month end. The sum of all 12 months
movement is then presented.
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued
ECL allowance movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
254
635
634
(3)
1,520
Transferred from Stage 1 to Stage 2
(79)
277
\u2014
\u2014
198
Transferred from Stage 2 to Stage 1
87
(243)
\u2014
\u2014
(156)
Transferred to Stage 3
\u2014
(108)
190
\u2014
82
Transferred from Stage 3
\u2014
21
(47)
\u2014
(26)
Net remeasurement (within Stage)
(8)
15
75
(10)
72
New loans originated/top-ups
57
\u2014
\u2014
\u2014
57
Redemptions/repayments
(33)
(69)
\u2014
\u2014
(102)
Impact of model and overlay changes
4
41
(37)
\u2014
8
Impact of credit or economic risk parameters
(16)
(17)
(8)
\u2014
(41)
Net remeasurement of ECL Allowance
12
(83)
173
(10)
92
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(88)
(29)
(56)
\u2014
(173)
Exchange translation adjustments
7
4
5
\u2014
16
Other movements
(1)
(3)
18
1
15
At 31 December
184
524
648
(12)
1,344
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
263
646
700
9
1,618
Transferred from Stage 1 to Stage 2
(100)
252
\u2014
\u2014
152
Transferred from Stage 2 to Stage 1
73
(209)
\u2014
\u2014
(136)
Transferred to Stage 3
(1)
(99)
180
\u2014
80
Transferred from Stage 3
2
28
(52)
\u2014
(22)
Net remeasurement (within Stage)
29
67
56
(12)
140
New loans originated/top-ups
49
\u2014
\u2014
\u2014
49
Redemptions/repayments
(25)
(99)
\u2014
\u2014
(124)
Impact of model and overlay changes
(16)
34
82
(4)
96
Impact of credit or economic risk parameters
(22)
19
(16)
\u2014
(19)
Net remeasurement of ECL Allowance
(11)
(7)
250
(16)
216
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(9)
(8)
(183)
\u2014
(200)
Exchange translation adjustments
\u2014
2
2
\u2014
4
Other movements
11
2
(10)
4
7
At 31 December
254
635
634
(3)
1,520
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued (audited)
Total exposures to which an ECL applies increased during the year by\u00a0
\u20ac 4.2 billion from \u20ac 67.0 billion at 1 January 2024 to \u20ac 71.2 billion at
31\u00a0December 2024. The increase in the year was driven by the strong
new lending in the year and the final tranche of the\u00a0Ulster Bank tracker
(and linked) mortgage portfolio acquisition (which is included within
\u2018New loans originated/top-ups\u2019).
Stage transfers are a key component of ECL allowance movements
(i.e. Stage 1 to Stage 2 to Stage 3 and vice versa) in addition to the net
remeasurement of ECL due to change in risk parameters within a
stage. Excluding the impact of model/overlay changes and the updated
macroeconomic scenarios, an ECL charge of \u20ac 125 million occurred
due to underlying credit management activity and a slight deterioration
in credit parameters which inform the modelled outcomes.
The impact of model and overlay changes resulted in an ECL charge of
\u20ac 8 million. This was driven by a \u20ac 67 million charge following the
deployment of the recalibrated grading models and a \u20ac 59 million
writeback relating to post model adjustments, largely driven by
utilisation as previously identified risks have now been captured in the
modelled outcomes. Further details on the post model adjustments are
outlined on pages 200 and 201. These ensure exposures subject to
risks which are not adequately reflected in the modelled outcomes,
retain an appropriate ECL.
The updated macroeconomic scenarios and weightings resulted in an
ECL release of \u20ac 41 million. This ECL movement is presented
separately within \u2018Impact of credit or economic risk parameters\u2019. This
release was most significant within the non-property business portfolio
accounting for a release of \u20ac 32 million within the portfolio. Despite the
update to the probability weightings tilting towards the downside
scenarios, the writeback reflects a more favourable base scenario
following the observed easing inflation and a reduction in interest and
unemployment rates. However, downside risks remain a concern, as
heightened geopolitical risks necessitate the Group\u2019s conservative
stance.
The gross loan transfers from Stage 1 to Stage 2 of \u20ac 6.3 billion are
due to underlying credit management activity where a significant
increase in credit risk occurred during the year through either the
quantitative or qualitative criteria for stage movement. 43% of the
movements relied on a qualitative or backstop indicator of significant
increase in credit risk (e.g. forbearance or movement to a watch grade)
with 4% caused solely by the backstop of 30 days past due. Of the
\u20ac\u00a06.3 billion which transferred from Stage 1 to Stage 2 in the year
approximately \u20ac 4.2 billion is reported as Stage 2 at 31 December 2024.
Where a movement to Stage 2 is triggered by multiple drivers
simultaneously these are reported in the following order: quantitative,
qualitative and backstop.
Similarly, transfers from Stage 2 to Stage 1 of \u20ac 4.5 billion represent
those loans where the triggers for significant increase in credit risk no
longer apply or loans that have fulfilled a probation period.
These transfers include loans which have been upgraded through
normal credit management processes and incorporates loans which
transferred due to the impact of the updated macroeconomic scenarios
and weightings.
Transfers from Stage 2 to Stage 3 of \u20ac 0.9 billion represent those loans
that defaulted during the year. These arose in cases where it was
determined that the customers were unlikely to pay their loans in full
without the realisation of collateral regardless of the existence of any
past due amount or the number of days past due. In addition, transfers
also include all borrowers that are 90 days or more past due on a
material obligation. Of the transfers from Stage 2 to Stage 3, \u20ac 0.3
billion had transferred from Stage 1 to Stage 2 earlier in the year.
Transfers from Stage 3 to Stage 2 of \u20ac 0.2 billion were mainly driven by
resolution activity with the customer, through either restructuring or
forbearance previously granted and which subsequently adhered to
default probation requirements. As part of the credit management
practices, active monitoring of loans and their adherence to default
probation requirements is in place.
In summary, the staging movements of the overall portfolio were as
follows:
Stage 1 loans have increased by \u20ac 3.8 billion to \u20ac 61.1 billion (2023:
\u20ac\u00a057.3 billion) due to strong new lending and the migration of the final
tranche of the Ulster Bank tracker (and linked) mortgage portfolio
acquisition.
Stage 2 loans have\u00a0increased by \u20ac 0.3 billion to \u20ac 8.0 billion (2023:
\u20ac\u00a07.7 billion). The increase in Stage 2 loans was driven by the
non\u2011property business and other personal portfolios which increased
by\u00a0\u20ac\u00a00.5 billion and \u20ac\u00a00.4\u00a0billion respectively. The increase in these
portfolios was impacted by the deployment in the year of the
recalibrated grading models which reflects an improvement in how the
Group measures the risk in these portfolios as opposed to any
deterioration in customer asset quality. These increases were slightly
offset by a \u20ac\u00a00.5\u00a0billion reduction in the residential mortgages portfolio.
Stage 3 loans remained unchanged in the year at \u20ac 1.9 billion with an
ECL of \u20ac 0.6 billion, resulting in cover of 34.3% (2023: 33.0%).
Further details on the stage movements by asset class are set out in
the following tables on pages 213 and 214.
Movements in off-balance sheet exposures (audited)
The following tables set out the movements in the nominal amount and ECL allowance for loan commitments and financial guarantees by ECL
staging for the year to 31 December 2024 and 2023 :
Nominal amount movements (audited)
2024
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
14,921
1,136
71
8
16,136
790
52
14
1
857
Transferred from Stage 1 to Stage 2
(835)
835
\u2014
\u2014
\u2014
(71)
71
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
401
(401)
\u2014
\u2014
\u2014
28
(28)
\u2014
\u2014
\u2014
Transferred to Stage 3
(16)
(20)
36
\u2014
\u2014
(2)
\u2014
2
\u2014
\u2014
Transferred from Stage 3
10
8
(18)
\u2014
\u2014
1
\u2014
(1)
\u2014
\u2014
Other movements1
873
(179)
(6)
(1)
687
137
(16)
(1)
(1)
119
At 31 December
15,354
1,379
83
7
16,823
883
79
14
\u2014
976
2023
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
13,947
1,033
80
\u2014
15,060
738
45
19
\u2014
802
Transferred from Stage 1 to Stage 2
(631)
631
\u2014
\u2014
\u2014
(40)
40
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
456
(456)
\u2014
\u2014
\u2014
51
(51)
\u2014
\u2014
\u2014
Transferred to Stage 3
(17)
(8)
25
\u2014
\u2014
(1)
(1)
2
\u2014
\u2014
Transferred from Stage 3
7
5
(12)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other movements1
1,159
(69)
(22)
8
1,076
42
19
(7)
1
55
At 31 December
14,921
1,136
71
8
16,136
790
52
14
1
857
1. Includes new commitments, utilised and expired commitments.
The internal credit grade profile of loan commitments and financial guarantees is set out in the following table (audited):
2024
2023
\u20ac m
\u20ac m
Strong
10,858
11,942
Satisfactory
6,435
4,711
Criticised watch
381
187
Criticised recovery
22
60
Default
103
93
Total
17,799
16,993
Non-performing off-balance sheet commitments
Total non-performing off-balance sheet commitments amounted to \u20ac 103 million (2023: \u20ac 93 million).
Movements in off-balance sheet exposures continued (audited)
ECL allowance movements (audited)
2024
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
12
26
4
1
43
2
5
9
\u2014
16
Transferred from Stage 1 to Stage 2
(3)
22
\u2014
\u2014
19
\u2014
5
\u2014
\u2014
5
Transferred from Stage 2 to Stage 1
6
(32)
\u2014
\u2014
(26)
2
(3)
\u2014
\u2014
(1)
Transferred to Stage 3
\u2014
\u2014
2
\u2014
2
\u2014
(1)
2
\u2014
1
Transferred from Stage 3
\u2014
\u2014
(1)
\u2014
(1)
\u2014
1
(1)
\u2014
\u2014
Net remeasurement
\u2014
7
(2)
\u2014
5
(2)
(3)
(2)
\u2014
(7)
Net income statement charge/(credit)
3
(3)
(1)
\u2014
(1)
\u2014
(1)
(1)
\u2014
(2)
Other movements
1
\u2014
1
\u2014
2
(1)
\u2014
\u2014
\u2014
(1)
At 31 December
16
23
4
1
44
1
4
8
\u2014
13
2023
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
19
35
5
\u2014
59
2
4
13
\u2014
19
Transferred from Stage 1 to Stage 2
(2)
23
\u2014
\u2014
21
(3)
4
\u2014
\u2014
1
Transferred from Stage 2 to Stage 1
3
(12)
\u2014
\u2014
(9)
3
(5)
\u2014
\u2014
(2)
Transferred to Stage 3
\u2014
(2)
3
\u2014
1
(1)
\u2014
1
\u2014
\u2014
Transferred from Stage 3
1
\u2014
(1)
\u2014
\u2014
1
\u2014
(1)
\u2014
\u2014
Net remeasurement
(9)
(17)
(2)
\u2014
(28)
\u2014
1
(2)
\u2014
(1)
Net income statement (credit)/charge
(7)
(8)
\u2014
\u2014
(15)
\u2014
\u2014
(2)
\u2014
(2)
Other movements
\u2014
(1)
(1)
1
(1)
\u2014
1
(2)
\u2014
(1)
At 31 December
12
26
4
1
43
2
5
9
\u2014
16
The following table analyses the residential mortgage portfolio at amortised cost by segment, internal credit ratings and ECL staging at
31 December 2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Owner occupier
34,346
417
\u2014
925
\u2014
35,688
32,068
405
\u2014
854
\u2014
33,327
Buy-to-let
1,174
62
\u2014
46
\u2014
1,282
1,315
71
\u2014
51
\u2014
1,437
Total
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
Analysed by internal credit ratings
Strong
28,930
311
\u2014
849
\u2014
30,090
25,812
324
\u2014
758
\u2014
26,894
Satisfactory
4,829
150
\u2014
72
\u2014
5,051
5,758
140
\u2014
68
\u2014
5,966
Total strong/satisfactory
33,759
461
\u2014
921
\u2014
35,141
31,570
464
\u2014
826
\u2014
32,860
Criticised watch
786
15
\u2014
11
\u2014
812
891
10
\u2014
33
\u2014
934
Criticised recovery
142
\u2014
\u2014
3
\u2014
145
247
\u2014
\u2014
4
\u2014
251
Total criticised
928
15
\u2014
14
\u2014
957
1,138
10
\u2014
37
\u2014
1,185
Non-performing
833
3
\u2014
36
\u2014
872
675
2
\u2014
42
\u2014
719
Gross carrying amount
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
Analysed by ECL staging
Stage 1
32,799
441
\u2014
925
\u2014
34,165
30,318
436
\u2014
840
\u2014
31,594
Stage 2
1,820
35
\u2014
10
\u2014
1,865
2,324
38
\u2014
23
\u2014
2,385
Stage 3
731
3
\u2014
36
\u2014
770
644
2
\u2014
42
\u2014
688
POCI
170
\u2014
\u2014
\u2014
\u2014
170
97
\u2014
\u2014
\u2014
\u2014
97
Total
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
ECL allowance \u2013 statement of financial position
Stage 1
10
\u2014
\u2014
\u2014
\u2014
10
19
\u2014
\u2014
\u2014
\u2014
19
Stage 2
52
1
\u2014
\u2014
\u2014
53
76
1
\u2014
\u2014
\u2014
77
Stage 3
206
1
\u2014
3
\u2014
210
202
\u2014
\u2014
5
\u2014
207
POCI
(3)
\u2014
\u2014
\u2014
\u2014
(3)
6
\u2014
\u2014
\u2014
\u2014
6
Total
265
2
\u2014
3
\u2014
270
303
1
\u2014
5
\u2014
309
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
0.1
\u2014
\u2014
\u2014
\u2014
0.1
Stage 2
2.9
2.5
\u2014
\u2014
\u2014
2.8
3.3
2.4
\u2014
\u2014
\u2014
3.2
Stage 3
28.2
30.3
\u2014
8.3
\u2014
27.2
31.4
\u2014
\u2014
9.7
\u2014
30.0
POCI
(1.8)
\u2014
\u2014
\u2014
\u2014
(1.8)
6.8
\u2014
\u2014
\u2014
\u2014
6.8
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
(27)
\u2014
\u2014
(1)
\u2014
(28)
36
1
\u2014
\u2014
\u2014
37
Recoveries of amounts
previously written-off
(8)
\u2014
\u2014
\u2014
\u2014
(8)
(7)
\u2014
\u2014
\u2014
\u2014
(7)
Net credit impairment
(writeback)/charge
(35)
\u2014
\u2014
(1)
\u2014
(36)
29
1
\u2014
\u2014
\u2014
30
Indexed loan-to-value ratios of the Group\u2019s residential mortgage portfolio
The following table profiles the residential mortgage portfolio by the indexed loan-to-value ratios at 31 December 2024 and 20231:
2024
2023
(Audited)
At amortised cost
At amortised cost
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Less than 80%
31,968
1,830
702
154
34,654
28,653
2,308
652
85
31,698
81 \u2013 100%
2,082
26
42
5
2,155
2,865
63
21
2
2,951
100 \u2013 120%
32
2
9
1
44
27
4
5
\u2014
36
Greater than 120%
80
6
15
3
104
47
8
6
\u2014
61
Total with LTVs
34,162
1,864
768
163
36,957
31,592
2,383
684
87
34,746
Unsecured
3
1
2
7
13
2
2
4
10
18
Total
34,165
1,865
770
170
36,970
31,594
2,385
688
97
34,764
Of which:
Owner occupier
Less than 80%
30,950
1,669
646
146
33,411
27,504
2,111
590
85
30,290
81 \u2013 100%
2,077
27
31
3
2,138
2,847
68
18
2
2,935
100 \u2013 120%
31
1
7
1
40
25
6
7
\u2014
38
Greater than 120%
76
5
10
3
94
44
7
5
\u2014
56
Total with LTVs
33,134
1,702
694
153
35,683
30,420
2,192
620
87
33,319
Unsecured
2
\u2014
1
2
5
1
\u2014
2
5
8
Total
33,136
1,702
695
155
35,688
30,421
2,192
622
92
33,327
1. At 31 December 2023, this table was reported for ROI mortgages only. At 31 December 2024, this table represents the total Group mortgage portfolio and the 2023
figures have been re-presented to reflect same.
The following table analyses other personal lending at amortised cost by segment, internal credit ratings and ECL staging at 31 December 2024
and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Credit cards
736
9
\u2014
22
\u2014
767
700
9
\u2014
23
\u2014
732
Loans/overdrafts
2,370
84
\u2014
44
\u2014
2,498
2,125
36
\u2014
47
\u2014
2,208
Total
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
Analysed by internal credit ratings
Strong
469
9
\u2014
59
\u2014
537
1,326
14
\u2014
61
\u2014
1,401
Satisfactory
1,797
76
\u2014
6
\u2014
1,879
1,153
29
\u2014
6
\u2014
1,188
Total strong/satisfactory
2,266
85
\u2014
65
\u2014
2,416
2,479
43
\u2014
67
\u2014
2,589
Criticised watch
728
8
\u2014
\u2014
\u2014
736
253
1
\u2014
2
\u2014
256
Criticised recovery
13
\u2014
\u2014
\u2014
\u2014
13
14
\u2014
\u2014
\u2014
\u2014
14
Total criticised
741
8
\u2014
\u2014
\u2014
749
267
1
\u2014
2
\u2014
270
Non-performing
99
\u2014
\u2014
1
\u2014
100
79
1
\u2014
1
\u2014
81
Gross carrying amount
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
Analysed by ECL staging
Stage 1
2,403
84
\u2014
62
\u2014
2,549
2,511
41
\u2014
61
\u2014
2,613
Stage 2
604
9
\u2014
3
\u2014
616
235
4
\u2014
8
\u2014
247
Stage 3
99
\u2014
\u2014
1
\u2014
100
79
\u2014
\u2014
1
\u2014
80
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
ECL allowance \u2013 statement of financial position
Stage 1
18
1
\u2014
\u2014
\u2014
19
20
\u2014
\u2014
1
\u2014
21
Stage 2
51
1
\u2014
\u2014
\u2014
52
31
1
\u2014
\u2014
\u2014
32
Stage 3
65
\u2014
\u2014
1
\u2014
66
44
\u2014
\u2014
\u2014
\u2014
44
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
134
2
\u2014
1
\u2014
137
95
1
\u2014
1
\u2014
97
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.8
0.6
\u2014
\u2014
\u2014
0.7
0.8
\u2014
\u2014
0.2
\u2014
0.8
Stage 2
8.5
9.3
\u2014
\u2014
\u2014
8.5
13.3
25.0
\u2014
\u2014
\u2014
12.9
Stage 3
65.4
\u2014
\u2014
63.0
\u2014
65.3
55.2
\u2014
\u2014
\u2014
\u2014
55.2
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
81
\u2014
\u2014
\u2014
\u2014
81
40
\u2014
\u2014
\u2014
\u2014
40
Recoveries of amounts
previously written-off
(2)
\u2014
\u2014
\u2014
\u2014
(2)
(4)
\u2014
\u2014
\u2014
\u2014
(4)
Net credit impairment charge
79
\u2014
\u2014
\u2014
\u2014
79
36
\u2014
\u2014
\u2014
\u2014
36
The following table analyses property and construction lending at amortised cost by segment, internal credit ratings and ECL staging at
31 December 2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Investment:
Residential investment
40
1,671
\u2014
409
\u2014
2,120
51
1,682
\u2014
244
\u2014
1,977
Student housing
\u2014
337
\u2014
541
\u2014
878
\u2014
258
\u2014
571
\u2014
829
Housing associations
\u2014
157
\u2014
486
\u2014
643
\u2014
145
\u2014
431
\u2014
576
Commercial investment \u2013 Office
23
1,433
\u2014
400
\u2014
1,856
29
1,569
\u2014
398
\u2014
1,996
Commercial investment \u2013 Retail
35
658
\u2014
90
\u2014
783
47
891
\u2014
58
\u2014
996
Commercial investment \u2013 Mixed
49
697
\u2014
116
\u2014
862
66
852
\u2014
132
\u2014
1,050
Commercial investment \u2013
Industrial
20
280
\u2014
160
\u2014
460
27
310
\u2014
155
\u2014
492
Total investment
167
5,233
\u2014
2,202
\u2014
7,602
220
5,707
\u2014
1,989
\u2014
7,916
Land and development:
Residential development
25
574
\u2014
101
\u2014
700
28
668
\u2014
154
\u2014
850
Commercial development
5
14
\u2014
90
\u2014
109
5
95
\u2014
42
\u2014
142
Total land and development
30
588
\u2014
191
\u2014
809
33
763
\u2014
196
\u2014
992
Contractors
231
91
\u2014
28
\u2014
350
203
83
\u2014
43
\u2014
329
Total
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
Analysed by internal credit ratings
Strong
54
4,473
\u2014
1,108
\u2014
5,635
141
4,904
\u2014
1,430
\u2014
6,475
Satisfactory
243
616
\u2014
1,227
\u2014
2,086
200
850
\u2014
681
\u2014
1,731
Total strong/satisfactory
297
5,089
\u2014
2,335
\u2014
7,721
341
5,754
\u2014
2,111
\u2014
8,206
Criticised watch
72
50
\u2014
3
\u2014
125
33
244
\u2014
19
\u2014
296
Criticised recovery
13
356
\u2014
7
\u2014
376
24
21
\u2014
30
\u2014
75
Total criticised
85
406
\u2014
10
\u2014
501
57
265
\u2014
49
\u2014
371
Non-performing
46
417
\u2014
76
\u2014
539
58
534
\u2014
68
\u2014
660
Gross carrying amount
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
Analysed by ECL staging
Stage 1
285
3,102
\u2014
2,110
\u2014
5,497
327
3,604
\u2014
1,892
\u2014
5,823
Stage 2
97
2,393
\u2014
235
\u2014
2,725
71
2,415
\u2014
268
\u2014
2,754
Stage 3
44
417
\u2014
76
\u2014
537
55
534
\u2014
68
\u2014
657
POCI
2
\u2014
\u2014
\u2014
\u2014
2
3
\u2014
\u2014
\u2014
\u2014
3
Total
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
ECL allowance \u2013 statement of financial position
Stage 1
1
44
\u2014
15
\u2014
60
2
40
\u2014
41
\u2014
83
Stage 2
5
208
\u2014
13
\u2014
226
5
241
\u2014
18
\u2014
264
Stage 3
15
149
\u2014
15
\u2014
179
19
159
\u2014
17
\u2014
195
POCI
(1)
\u2014
\u2014
\u2014
\u2014
(1)
(1)
\u2014
\u2014
\u2014
\u2014
(1)
Total
20
401
\u2014
43
\u2014
464
25
440
\u2014
76
\u2014
541
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.4
1.4
\u2014
0.7
\u2014
1.1
0.5
1.1
\u2014
2.2
\u2014
1.4
Stage 2
5.0
8.7
\u2014
5.6
\u2014
8.3
7.5
10.0
\u2014
6.7
\u2014
9.6
Stage 3
35.2
35.8
\u2014
19.6
\u2014
33.4
34.5
29.8
\u2014
24.2
\u2014
29.7
POCI
(51.4)
\u2014
\u2014
\u2014
\u2014
(51.4)
(43.7)
\u2014
\u2014
\u2014
\u2014
(43.7)
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
1
(6)
\u2014
14
\u2014
9
4
220
\u2014
43
\u2014
267
Recoveries of amounts
previously written-off
(3)
(3)
\u2014
\u2014
\u2014
(6)
(4)
(1)
\u2014
(1)
\u2014
(6)
Net credit impairment
(writeback)/charge
(2)
(9)
\u2014
14
\u2014
3
\u2014
219
\u2014
42
\u2014
261
Loans and advances to customers \u2013 Non-property business
The following table analyses non-property business lending at amortised cost by segment, internal credit ratings and ECL staging at 31 December
2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Natural resources
18
531
4,204
242
\u2014
4,995
20
334
3,000
256
\u2014
3,610
Of which renewables
\u2014
282
4,176
21
\u2014
4,479
\u2014
\u2014
2,899
8
\u2014
2,907
Leisure
298
2,016
\u2014
628
\u2014
2,942
340
1,876
\u2014
450
\u2014
2,666
Manufacturing
148
2,395
\u2014
210
\u2014
2,753
141
2,257
\u2014
121
\u2014
2,519
Health, education and social
work
109
1,327
\u2014
443
\u2014
1,879
112
1,344
\u2014
576
\u2014
2,032
Services
532
1,174
265
279
\u2014
2,250
504
1,074
198
288
\u2014
2,064
Agriculture, forestry and fishing
1,284
353
\u2014
54
\u2014
1,691
1,338
382
\u2014
60
\u2014
1,780
Retail and wholesale trade
381
1,408
\u2014
106
\u2014
1,895
398
1,257
\u2014
92
\u2014
1,747
Transport and storage
205
785
394
464
\u2014
1,848
192
697
365
456
\u2014
1,710
Telecomms, media and
technology
33
715
665
37
\u2014
1,450
35
740
555
64
\u2014
1,394
Financial, insurance and
other government\u00a0activities
25
314
\u2014
81
50
470
27
376
\u2014
75
28
506
Total
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
Of which Syndicated &
International Finance (SIF)
\u2014
2,803
\u2014
\u2014
\u2014
2,803
\u2014
2,618
\u2014
\u2014
\u2014
2,618
Analysed by internal credit ratings
Strong
141
5,674
4,858
1,452
20
12,145
809
6,216
3,751
1,541
9
12,326
Satisfactory
2,189
4,726
579
778
30
8,302
1,853
3,210
302
448
19
5,832
Total strong/satisfactory
2,330
10,400
5,437
2,230
50
20,447
2,662
9,426
4,053
1,989
28
18,158
Criticised watch
453
393
2
45
\u2014
893
153
599
37
122
\u2014
911
Criticised recovery
53
115
51
122
\u2014
341
75
198
28
137
\u2014
438
Total criticised
506
508
53
167
\u2014
1,234
228
797
65
259
\u2014
1,349
Non-performing
197
110
38
147
\u2014
492
217
114
\u2014
190
\u2014
521
Gross carrying amount
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
Analysed by ECL staging
Stage 1
2,241
9,349
5,206
2,062
50
18,908
2,490
8,856
4,023
1,825
28
17,222
Stage 2
591
1,558
284
335
\u2014
2,768
402
1,367
95
422
\u2014
2,286
Stage 3
188
109
38
147
\u2014
482
196
111
\u2014
191
\u2014
498
POCI
13
2
\u2014
\u2014
\u2014
15
19
3
\u2014
\u2014
\u2014
22
Total
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
ECL allowance \u2013 statement of financial position
Stage 1
10
46
19
20
\u2014
95
13
54
17
47
\u2014
131
Stage 2
30
125
20
18
\u2014
193
32
190
10
30
\u2014
262
Stage 3
65
42
6
80
\u2014
193
83
60
\u2014
45
\u2014
188
POCI
(7)
(1)
\u2014
\u2014
\u2014
(8)
(7)
(1)
\u2014
\u2014
\u2014
(8)
Total
98
212
45
118
\u2014
473
121
303
27
122
\u2014
573
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.4
0.5
0.4
1.0
\u2014
0.5
0.5
0.6
0.4
2.6
\u2014
0.8
Stage 2
5.0
8.0
6.9
5.4
\u2014
6.9
8.0
13.9
10.5
7.1
\u2014
11.4
Stage 3
34.6
38.7
16.0
55.0
\u2014
40.2
42.4
54.1
\u2014
23.6
\u2014
37.8
POCI
(48.6)
(57.2)
\u2014
\u2014
\u2014
(49.7)
(36.9)
(33.3)
\u2014
\u2014
\u2014
(39.0)
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
(5)
(63)
22
76
\u2014
30
2
(125)
(7)
2
\u2014
(128)
Recoveries of amounts
previously written-off
(7)
(7)
\u2014
(2)
\u2014
(16)
(7)
(1)
\u2014
(2)
\u2014
(10)
Net credit impairment
(writeback)/charge
(12)
(70)
22
74
\u2014
14
(5)
(126)
(7)
\u2014
\u2014
(138)
External credit ratings of certain financial asset s (audited)
The following table sets out the credit quality of certain financial assets based on available external credit ratings at 31 December 2024 and 2023.
These comprise loans and advances to banks of \u20ac 1,321 million (2023: \u20ac 1,329 million), securities financing of \u20ac 6,643 million (2023: \u20ac 6,466 million),
and investment debt securities at amortised cost of \u20ac 4,803 million (2023: \u20ac 4,510 million) and at FVOCI of \u20ac\u00a013,568 million (2023: \u20ac\u00a012,488
million) and trading portfolio financial assets of \u20ac 121 million (2023: \u20ac 84 million). Information on the credit ratings for loans and advances to
customers where an external credit rating is available is disclosed on page 227.
2024
2023
(Audited)
At amortised cost
At amortised cost
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
1,213
\u2014
2,412
1,946
5,571
1,725
\u2014
2,307
1,720
5,752
A/A-
5,391
1,240
17
167
6,815
4,829
1,126
16
192
6,163
BBB+/BBB/BBB-
15
245
34
\u2014
294
19
203
33
5
260
Sub investment
3
25
\u2014
\u2014
28
\u2014
73
\u2014
\u2014
73
Unrated
6
53
\u2014
\u2014
59
2
55
\u2014
\u2014
57
Total
6,628
1,563
2,463
2,113
1
12,767
6,575
1,457
2,356
1,917
1
12,305
Of which:
Stage 1
6,628
1,563
2,463
2,113
12,767
6,575
1,449
2,356
1,917
12,297
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8
\u2014
\u2014
8
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2024
2023
(Audited)
At FVOCI
At FVOCI
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
5,164
196
5,002
153
10,515
4,630
157
4,321
454
9,562
A/A-
1,205
373
490
\u2014
2,068
1,312
314
265
\u2014
1,891
BBB+/BBB/BBB-
163
169
643
\u2014
975
256
151
628
\u2014
1,035
Sub investment
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Unrated
\u2014
\u2014
10
\u2014
10
\u2014
\u2014
\u2014
\u2014
\u2014
Total
6,532
738
6,145
2
153
13,568
6,198
622
5,214
2
454
12,488
Of which:
Stage 1
6,532
738
6,145
153
13,568
6,198
622
5,214
454
12,488
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2024
2023
(Audited)
At FVTPL
At FVTPL
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
\u2014
\u2014
103
\u2014
103
\u2014
\u2014
84
\u2014
84
A/A-
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
BBB+/BBB/BBB-
10
6
\u2014
\u2014
16
\u2014
\u2014
\u2014
\u2014
\u2014
Sub investment
2
\u2014
\u2014
\u2014
2
\u2014
\u2014
\u2014
\u2014
\u2014
Unrated
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
12
6
103
\u2014
121
\u2014
\u2014
84
\u2014
84
Of which:
Stage 1
12
6
103
\u2014
121
\u2014
\u2014
84
\u2014
84
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1. Relates to asset backed securities.
2. Includes supranational banks and government agencies.
Management and measurement (audited)
The Market Risk Management framework and policies set out the key
requirements for managing market risk. The key aspects of this are:
\u2022 The Group\u2019s Treasury function is responsible for managing market
risk. Treasury also has a mandate to trade on its own account in
selected wholesale markets with risk tolerances approved on an
annual basis through the Group\u2019s Risk Appetite process;
\u2022 The Group documents its annual Market Risk Strategy to ensure
market risk aligns with the Group\u2019s strategic business plan; and
\u2022 Market risk is managed against a range of Board approved internal
capital limits which cover market risk in the trading book, interest rate
risk and credit spread risk in the banking book. The Board approved
limits are supplemented by a range of ALCo approved limits which
include nominal, sensitivity limits and \u2018stop loss\u2019 limits.
Market risk is managed and measured using portfolio sensitivities,
internal capital limits Value at Risk (\u2018VaR\u2019) and stress testing. Interest
rate gaps and sensitivities to various risk factors are measured and
reported on a daily basis. In terms of the VaR metric, the Group
calculates a daily historical simulation VaR to a 95% confidence level,
using a one day holding period and based on one year of historic data.
In addition to VaR, Capital at Risk (\u2018CaR\u2019) is also measured to a one
year1 time horizon, a 99% confidence level and a longer set of data.
Credit risk issues inherent in the market risk portfolios are also subject
to the credit risk framework that is described in Section 2.1.
The Group maintains a Structural Hedging Programme (SHP), subject
to oversight by ALCo. The SHP provides a framework for assessing
and re-balancing the extent of earnings sensitivity (to market rate
changes) versus the economic value (or capital) attributed to IRRBB.
Forecast structural changes in the composition of the balance sheet are
a key driver of the annual SHP strategy. From an IRRBB capital
perspective the SHP strategy seeks to maintain a broadly duration-
matched repricing term profile where term asset positions (typically,
interest rate derivatives and fixed rate mortgages) are offset by stable,
non and low interest-bearing liabilities, principally comprising current
accounts and deposits, and equity.
The SHP strategy provides an effective basis for stabilising income
over the medium term and\u00a0 protecting income during periods of falling
interest rates. SHP interest rate derivatives are subject to either cash
flow hedging of floating-rate assets or macro fair value hedging of
customer accounts.
1. The Capital at Risk on core trading book positions is assessed using a ten day
horizon, with the exception of FX which is assessed using a one year horizon.
Monitoring, escalating and reporting (audited)
On a daily basis front office and risk functions receive a range of
valuation, sensitivity and market risk measurement reports, while ALCo
receives a monthly market risk commentary and summary risk profile.
Market risk exposures are reported to the Group Risk Committee
(\u2018GRC\u2019) and Board Risk Committee (\u2018BRC\u2019) on a monthly basis through
the CRO Report.
2.2 Market and Equity risks continued
(a) Market risk continued (audited)
The following table sets out financial assets and financial liabilities at 31 December 2024 and 2023 subject to market risk analysed between
trading and non-trading portfolios, showing the principal market risks to which the assets and liabilities are exposed:
2024
(Audited)
Market risk measures
Carrying
amount
Trading
portfolios
Non-trading
portfolios
\u20ac m
\u20ac m
\u20ac m
Risk factors
Assets subject to market risk
Cash and balances at central banks
37,315
\u2014
37,315
Interest rate, foreign exchange
Trading portfolio financial assets
136
136
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
2,144
425
1,719
Interest rate, foreign exchange, credit
spreads, equity, inflation rates, wholesale
electricity prices
Loans and advances to banks
1,321
\u2014
1,321
Interest rate, foreign exchange
Loans and advances to customers
69,889
\u2014
69,889
Interest rate, foreign exchange
Securities financing
6,643
\u2014
6,643
Interest rate, credit spreads, foreign
exchange
Investment securities
18,668
\u2014
18,668
Interest rate, foreign exchange, credit
spreads, equity
Liabilities subject to market risk
Deposits by central banks and banks
836
\u2014
836
Interest rate, foreign exchange
Customer accounts
109,883
\u2014
109,883
Interest rate, foreign exchange
Securities financing
196
\u2014
196
Interest rate, credit spreads, foreign
exchange
Trading portfolio financial liabilities
262
262
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
1,807
461
1,346
Interest rate, foreign exchange, credit
spreads, equity, inflation rates, wholesale
electricity prices
Debt securities in issue
8,832
\u2014
8,832
Interest rate, credit spreads, foreign
exchange
Subordinated liabilities and other capital instruments
1,627
\u2014
1,627
Interest rate, credit spreads
2023
(Audited)
Market risk measures
Carrying
amount
Trading
portfolios
Non-trading
portfolios
\u20ac m
\u20ac m
\u20ac m
Risk factors
Assets subject to market risk
Cash and balances at central banks
38,018
\u2014
38,018
Interest rate, foreign exchange
Trading portfolio financial assets
93
93
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
2,377
457
1,920
Interest rate, foreign exchange, credit
spreads, equity, inflation rates
Loans and advances to banks
1,329
\u2014
1,329
Interest rate, foreign exchange
Loans and advances to customers
65,491
\u2014
65,491
Interest rate, foreign exchange
Securities financing
6,466
\u2014
6,466
Interest rate, credit spreads, foreign
exchange
Investment securities
17,353
\u2014
17,353
Interest rate, foreign exchange, credit
spreads, equity
Liabilities subject to market risk
Deposits by central banks and banks
1,780
\u2014
1,780
Interest rate, foreign exchange
Customer accounts
104,782
\u2014
104,782
Interest rate, foreign exchange
Securities financing
575
\u2014
575
Interest rate, credit spreads, foreign
exchange
Trading portfolio financial liabilities
139
139
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
1,902
448
1,454
Interest rate, foreign exchange, credit
spreads, equity, inflation rates
Debt securities in issue
8,423
\u2014
8,423
Interest rate, credit spreads, foreign
exchange
Subordinated liabilities and other capital instruments
1,473
\u2014
1,473
Interest rate, credit spreads
Interest rate sensitivity (audited)
The table below shows the sensitivity of the Group\u2019s banking book to an immediate and sustained +/- 100 basis point, +/-50 basis point and
+/-25\u00a0basis point movement in interest rates, in terms of the impact on net interest income on a forward looking basis over a twelve month period,
assuming no change in the balance sheet.
Sensitivity of projected net interest income to interest rate movements:
December 2024 (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
- 100bps
- 50bps
- 25bps
+ 25bps
+ 50bps
+ 100bps
Euro
(385)
(189)
(93)
80
163
329
Sterling
(37)
(19)
(9)
9
19
37
Other (mainly US $)
(17)
(8)
(4)
4
8
17
Total
(439)
(216)
(106)
93
190
383
December 2023 (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
- 100bps
- 50bps
- 25bps
+ 25bps
+ 50bps
+ 100bps
Euro
(332)
(145)
(53)
49
130
292
Sterling
(37)
(19)
(9)
9
18
37
Other (mainly US $)
(12)
(6)
(3)
3
6
11
Total
(381)
(170)
(65)
61
154
340
The above sensitivity table is computed under the assumption of an
unchanged balance sheet and that all market rates (Risk Free Rates/
Euribors/Swaps) move upwards or downwards in parallel. Managing
interest rate sensitivity has been a key risk management priority during
2024, given the evolving interest rate environment and the more
restrictive EBA NII Supervisory Outlier Test threshold. The year-on-year
increase in the reported sensitivity has been driven by the ongoing
dynamics in the customer deposit market which includes the growth in
balances, the slow pace of deposit balance migration from interest
insensitive to interest-bearing products and the impact of retail pass-
through models. On the asset side, increases in the bond portfolio and
a change in the mix of mortgage products towards variable rates have
also contributed. Given the composition of the balance sheet, and its
expected evolution, the trade\u2011off between managing IRRBB earnings
(NII Sensitivity) and economic value (Capital at Risk) perspectives will
continue to be a priority. In particular, the evolution of customer deposit
balance migration is closely monitored, given the \u2018static balance sheet\u2019
assumption underpinning this NII Sensitivity metric.
Group interest rate and foreign exchange rate VaR are calculated to a
95% confidence level with a one day holding period, and equity VaR is
calculated to a 99% confidence level with a one day holding period. At
31 December 2024, interest rate VaR stood at \u20ac 18.72 million, foreign
exchange rate VaR at \u20ac 0.32 million and equity VaR at \u20ac 0.2 million.
The Group recognises the limitations of VaR models, and supplements
its VaR measures with stress tests which draw from a longer set of
historical data and also with sensitivity measures.
Management and measurement (audited)
The pension risk framework and policies set out the key risk
management rules in place for this risk. The ability of the pension
schemes to meet the projected pension payments is managed by the
Trustees through the active management of the investment portfolios.
Although the Group has interaction with the trustees, it cannot direct
the investment strategy of the schemes.
The Group has developed a strategy for each of its defined benefit
schemes which include the following steps:
1. All defined benefit schemes are closed to future accrual.
2. They have funding plans (or are funded as required for the US
schemes) and each defined benefit scheme has an investment
strategy in place.
3. All schemes have a strategy of de-risking in line with their regulatory
requirements, funding positions and funding plans, taking into
account the nature of their liabilities.
The Irish Scheme continued to de-risk in 2024, with further sales of
equities. The Scheme has a Liability Driven Investment (\u2018LDI\u2019) portfolio
in place to hedge its interest rate and inflation risk, which is compromised
of a mixture of nominal bonds, inflation linked bonds as well as interest
rate and inflation derivatives .
Independent actuarial valuations for the Irish scheme and the UK
scheme are carried out on a triennial basis by the schemes\u2019 actuary,
Mercer. The most recent valuation of the Irish scheme was carried out at
30 June 2021 and reported the scheme to be in surplus. The next
actuarial valuation of the Irish scheme is being prepared with an effective
date of 30 June 2024 with the results expected by 31 March 2025. No
deficit funding is required at this time as the Irish scheme continues to
meet the minimum funding standard. The most recent valuation of the
UK scheme was carried out at 31 December 2020. The next actuarial
valuation of the UK scheme is being carried out for 31 December 2023
with the results expected by 31 March 2025.
As part of the investment strategy of the UK scheme, it was significantly
de-risked in December 2019. The Group agreed with the Scheme
Trustee a revised funding arrangement for the UK scheme to support
the purchase of a pensioner buy-in policy in respect of the pensioner
members and an assured payment policy (\u2018APP\u2019) in respect of the
deferred members. Under this funding arrangement, the Group expects
to make a payment of \u00a3 9.5 million in 2025. This amount is what is
expected to be required to finalise the buy-in of the scheme based on
the latest estimates from Legal & General Assurance Society LGAS. This
payment and any other related costs are subject to change prior to
finalisation.\u00a0
Monitoring, escalating and reporting (audited)
Pension risk is monitored and controlled in line with the requirements of
the Group\u2019s pension risk framework and policy. The surplus or deficit is
monitored on a monthly basis by the Group\u2019s risk team and is currently
reported monthly in both the financial risk report to the Group Asset &
Liabilities Committee and the Group Chief Risk Officer (\u2018CRO\u2019) report to
Group Risk Committee and Board Risk Committee.
Pension risk is also included in the internal stress test process. The
output of these stress tests is reviewed by ALCo and on an annual
basis an ICAAP Report is produced which is a comprehensive analysis
of the Group\u2019s capital position in base and stress scenarios over a three
year horizon. This document is reviewed and approved by the Board
and is submitted to the Joint Supervisory Team.
The pension capital at risk exposure is measured and reported monthly
in the CRO report against a Group Risk Appetite Statement watch
trigger. While the Group has taken certain risk mitigating actions, a
level of volatility associated with pension funding remains due to
potential financial market fluctuations and possible changes to pension
and accounting regulations.
2.3 Capital adequacy risk (audited)
Capital adequacy risk is the risk that the Group breaches or may
breach regulatory capital ratios and internal targets, measured on
a\u00a0forward looking basis across a range of scenarios, including a\u00a0severe
but plausible stress.
Identification and assessment (audited)
An annual MRA is conducted to identify all relevant (current and
anticipated) material risks which are then assessed from a capital
perspective. The sub-risks are identified as part of the MRA process
including risks surrounding the quality and composition of capital as
well as measurement and forecasting risk. Capital adequacy risk is
primarily evaluated through the annual financial planning and the
Group\u2019s ICAAP processes where the level of capital required to support
growth plans and meet regulatory requirements is assessed over the
three year planning horizon. Plans are assessed across a range of
scenarios ranging from base case and moderate downside scenarios
to\u00a0a severe but plausible stress using the Group\u2019s stress testing
methodologies.
Monitoring, escalating and reporting (audited)
The Group monitors its capital adequacy on a monthly basis through
a\u00a0capital reporting pack which is presented to senior executives and
Board setting out the evolution of the Group\u2019s capital position. The risk
profile, including performance against risk appetite, is presented to the
BRC via the CRO report which is produced independently by the
second line of defence. The escalation process, as stipulated under the
RAS policy, is commenced in the event of a breach of either the RAS
watch trigger or limit for any of the metrics. This ensures Board and
Regulator notification, where appropriate, within approved timeframes.
The output of internal stress tests is reviewed by ALCo and, on an
annual basis, an ICAAP report is produced which is a comprehensive
analysis of the Group\u2019s capital position in base and stress scenarios over
a three year horizon. The ICAAP document is reviewed and approved
by the Board and is submitted to the Joint Supervisory Team, where it
forms the basis of their supervisory review and evaluation\u00a0process.
Management and measurement (audited)
The objective of liquidity management is to ensure that, at all times,
the\u00a0Group holds sufficient funds to meet its contracted and contingent
commitments to customers and counterparties at an economic price.
The ILAAP Framework and supporting Funding and Liquidity risk policy
set out the key requirements for managing the risk. These include:
\u2022 adherence to both internal limits and regulatory defined liquidity
ratios including the Liquidity Coverage Ratio (\u2018LCR\u2019) and the Net
Stable Funding Ratio (\u2018NSFR\u2019). The LCR is designed to promote
short term resilience of the Group\u2019s liquidity risk profile by ensuring
that it has sufficient high quality liquid resources to survive an acute
stress scenario lasting for 30 days. The NSFR has a time horizon of
one year and has been developed to promote a sustainable maturity
structure of assets and liabilities;
\u2022 performing a multi-year projection of the Group\u2019s funding sources,
taking into account its baseline scenario, strategy and operational
plans as outlined in the Group\u2019s Funding and Liquidity Plan. The
purpose of this Plan is to set out a comprehensive, forward looking
liquidity and funding strategy for the Group, including material
subsidiary companies;
\u2022 assessing the Funding and Liquidity Plan under a range of adverse
scenarios, the outcomes of which should ensure sufficient liquidity to
implement a sustainable strategy, even in a stressed environment;
\u2022 maintaining a Contingency Funding Plan that identifies and quantifies
actions that are available to the Group in deteriorating liquidity
conditions and to help it emerge from a temporary liquidity crisis as a
credit-worthy institution;
\u2022 monitoring a further set of triggers and liquidity options outlined in the
Group\u2019s Recovery Plan, which presents the actions available to the
Group to restore viability in the event of extreme stress; and
\u2022 having an approved liquidity cost-benefit allocation mechanism in
place to attribute funding costs, benefits and risks to the Group\u2019s
business lines.
Funding structure (audited)
The Group\u2019s funding strategy is to deliver a sustainable, diversified and
robust customer deposit base at economic pricing and to further enhance
and strengthen the wholesale funding franchise, with appropriate
access to term markets to support core lending activities. The strategy
aims to deliver a solid funding structure that complies with internal and
regulatory policy requirements and reduces the probability of a liquidity
stress, i.e. an inability to meet funding obligations as they fall due.
Customer deposits represent the largest source of funding for the
Group, with the core retail franchises and accompanying deposit base
in both Ireland and the UK providing a stable and reasonably
predictable source of funds.
2024
2023
Customer accounts (audited)
\u20ac m
\u20ac m
Total
109,883
104,782
Of which:
Euro
98,270
93,732
Sterling
9,754
9,237
US Dollar
1,624
1,608
Other currencies
235
205
Customer accounts increased by \u20ac 5,101 million in 2024, driven by
higher personal and SME balances. This was predominantly reflected
in higher Euro time deposit accounts, coupled with an increase across
all other Group significant currencies (GBP and USD). There was a\u00a0 \u00a0 \u00a0
\u20ac 533 million increase in the value of GBP and USD deposits, mainly
due to currency movements.
1. QLA are assets that can be readily converted into cash, either with the market or with the monetary authorities, and where there is no\u00a0legal, operational or prudential
impediments to their use as liquid\u00a0assets.
2.4 Liquidity and funding risk continued
Composition of wholesale funding1 (audited)
The Group maintains access to a variety of sources of wholesale funding, including bank deposits, securities financing, debt securities and
subordinated debt. At 31 December 2024, total wholesale funding outstanding was \u20ac 11,491 million (2023: \u20ac 12,251 million), of which \u20ac 2,366
million is due to mature in less than one year (2023: \u20ac 2,805 million).
(Audited)
2024
< 1
month
\u20ac m
1\u20133
months
\u20ac m
3\u20136
months\u00a0
\u20ac m
6\u201312
months\u00a0
\u20ac m
Total
< 1 year
\u20ac m
1\u20133
years
\u20ac m
3\u20135
years
\u20ac m
> 5
years
\u20ac m
Total
\u20ac m
Deposits by central banks and banks
830
\u2014
6
\u2014
836
\u2014
\u2014
\u2014
836
Securities financing
184
12
\u2014
\u2014
196
\u2014
\u2014
\u2014
196
Senior debt
\u2014
\u2014
\u2014
495
495
2,183
3,461
1,734
7,873
ACS
2
\u2014
\u2014
\u2014
2
\u2014
5
20
27
Credit linked notes
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
95
95
Commercial paper
539
230
68
\u2014
837
\u2014
\u2014
\u2014
837
Subordinated liabilities and
other\u00a0capital\u00a0instruments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1,627
1,627
Total 31 December
1,555
242
74
495
2,366
2,183
3,466
3,476
11,491
Of which:
Secured
186
12
6
\u2014
204
\u2014
5
115
324
Unsecured
1,369
230
68
495
2,162
2,183
3,461
3,361
11,167
1,555
242
74
495
2,366
2,183
3,466
3,476
11,491
(Audited)
2023
< 1 month
\u20ac m
1\u20133
months
\u20ac m
3\u20136
months
\u20ac m
6\u201312
months
\u20ac m
Total
< 1 year
\u20ac m
1\u20133
years
\u20ac m
3\u20135
years
\u20ac m
> 5
years
\u20ac m
Total
\u20ac m
Deposits by central banks and banks
1,040
452
\u2014
\u2014
1,492
98
190
\u2014
1,780
Securities financing
358
217
\u2014
\u2014
575
\u2014
\u2014
\u2014
575
Senior debt
\u2014
\u2014
738
\u2014
738
2,786
1,643
3,229
8,396
ACS
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
5
22
27
Credit linked notes
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Commercial paper
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Subordinated liabilities and
other\u00a0capital\u00a0instruments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1,473
1,473
Total 31 December
1,398
669
738
\u2014
2,805
2,884
1,838
4,724
12,251
Of which:
Secured
358
217
\u2014
\u2014
575
98
195
22
890
Unsecured
1,040
452
738
\u2014
2,230
2,786
1,643
4,702
11,361
1,398
669
738
\u2014
2,805
2,884
1,838
4,724
12,251
1. The maturity analysis has been prepared using the residual contractual maturity of the liabilities.
Deposits by central banks and banks decreased by \u20ac 944 million
to\u00a0\u20ac\u00a0836 million, primarily driven by lower deposits by central banks
and\u00a0cash collateral received from derivative counterparties. For further
details, see note 28 to the Consolidated Financial Statements.
Securities Financing decreased \u20ac\u00a0379 million to \u20ac 196 million, reflective
of a decrease in standard bilateral bank repo activity (see the currency
split in the 'Currency composition of wholesale funding' table).
During 2024, senior debt decreased \u20ac 523 million to \u20ac 7,873 million,
primarily reflecting a $ 1 billion early redemption and a \u20ac 750 million
contractual maturity, offset by a $ 1 billion MREL bond issuance. Over
the twelve months to 31 December 2023, there was a net commercial
paper issuance of \u20ac 837 million, whilst outstanding asset-covered
securities (\u2018ACS\u2019) remained flat at \u20ac 27 million. For further details,
see\u00a0note 30 to the Consolidated Financial Statements. Subordinated
liabilities increased \u20ac 154 million to \u20ac 1,627 million, driven by a green
Tier 2 capital issuance of \u20ac\u00a0650 million, partially offset by \u20ac 500 million
redemption.
Financial assets and financial liabilities by contractual residual maturity (audited)
The following table analyses financial assets and financial liabilities by contractual residual maturity at 31 December 2024 and 2023:
(Audited)
2024
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets1
Cash and balances at central banks
37,315
\u2014
\u2014
\u2014
\u2014
37,315
Derivative financial instruments2
16
52
700
1,376
2,144
Loans and advances to banks3
642
679
\u2014
\u2014
\u2014
1,321
Loans and advances to customers3
2,319
1,331
2,950
20,778
43,855
71,233
Securities financing
5
1,610
2,970
2,058
\u2014
6,643
Investment securities4
\u2014
276
603
8,002
9,490
18,371
Other financial assets
\u2014
894
\u2014
\u2014
\u2014
894
40,281
4,806
6,575
31,538
54,721
137,921
Financial liabilities5,6
Deposits by central banks and banks
26
804
6
\u2014
\u2014
836
Customer accounts
93,977
7,790
4,856
3,230
30
109,883
Securities financing
\u2014
196
\u2014
\u2014
\u2014
196
Derivative financial instruments2
72
78
538
1,119
1,807
Debt securities in issue
\u2014
769
562
5,649
1,852
8,832
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
\u2014
1,627
1,627
Other financial liabilities
1,748
\u2014
\u2014
44
\u2014
1,792
95,751
9,631
5,502
9,461
4,628
124,973
2.4 Liquidity and funding risk continued
Financial assets and financial liabilities by contractual residual maturity continued (audited)
(Audited)
2023
On demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets1
Cash and balances at central banks
38,018
\u2014
\u2014
\u2014
\u2014
38,018
Derivative financial instruments2
\u2014
14
56
717
1,590
2,377
Loans and advances to banks3
588
741
\u2014
\u2014
\u2014
1,329
Loans and advances to customers3
2,145
1,770
3,003
18,545
41,548
67,011
Securities financing
10
849
3,329
2,278
\u2014
6,466
Investment securities4
23
586
470
6,484
9,435
16,998
Other financial assets
\u2014
688
\u2014
\u2014
\u2014
688
40,784
4,648
6,858
28,024
52,573
132,887
Financial liabilities5,6
Deposits by central banks and banks
22
1,470
\u2014
288
\u2014
1,780
Customer accounts
95,095
5,297
2,943
1,418
29
104,782
Securities financing
\u2014
575
\u2014
\u2014
\u2014
575
Derivative financial instruments3
\u2014
41
110
444
1,307
1,902
Debt securities in issue
\u2014
\u2014
738
4,434
3,251
8,423
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
\u2014
1,473
1,473
Other financial liabilities
1,571
\u2014
\u2014
\u2014
\u2014
1,571
96,688
7,383
3,791
6,584
6,060
120,506
1. Excludes trading portfolio financial assets of \u20ac 136 million (2023: \u20ac 93 million). The contractual maturity of those assets in 2024 is: \u20ac 26 million in <3 months but not on
demand; \u20ac 13 million in 1-5 years; and \u20ac 97 million over 5 years (2023: \u20ac 9 million in <3 months but not on demand;\u00a0 \u20ac 10 million in 3 months to 1 year; \u20ac 2 million in 1-5
years and \u20ac 72 million over 5 years).
2. Shown by maturity date of contract.
3. Shown gross of expected credit losses.
4. Excluding equity shares.
5. A maturity of lease liabilities is disclosed in note 31.
6. Excludes trading portfolio financial liabilities of \u20ac 262 million (2023: \u20ac 139 million). The contractual maturity of those liabilities in 2024 is: \u20ac 5 million in <3 months but not on
demand; \u20ac 190 million in 1-5 years and \u20ac 67 million over 5 years (2023: \u20ac 7 million in <3 months but not on demand; \u20ac 89 million in 1-5 years and \u20ac 43 million over 5 years).
Financial liabilities by undiscounted contractual maturity (audited)
The balances in the table below include the undiscounted cash flows relating to principal and interest on financial liabilities and as such will not
agree directly with the balances on the Consolidated Statement of Financial Position. All derivative financial instruments have been analysed
based on their contractual maturity undiscounted cash flows.
The following table analyses, on an undiscounted basis, financial liabilities by remaining contractual maturity at 31 December 2024 and\u00a02023:
In the daily management of liquidity risk, the Group adjusts the contractual outflows on customer deposits to reflect the inherent stability of these
deposits. Offsetting the liability outflows are cash inflows from the assets on the Consolidated Statement of Financial Position. Additionally, the
Group holds a stock of high-quality liquid assets, which\u00a0are held for the purpose of covering unexpected cash outflows.
(Audited)
2024
On
demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial liabilities1,2
Deposits by central banks and banks
26
804
6
\u2014
\u2014
836
Customer accounts
93,978
7,836
5,006
3,275
31
110,126
Securities financing
\u2014
196
\u2014
\u2014
\u2014
196
Derivative financial instruments
\u2014
137
263
472
116
988
Debt securities in issue
\u2014
813
880
6,761
2,232
10,686
Subordinated liabilities and other capital instruments
\u2014
\u2014
59
320
1,859
2,238
Other financial liabilities
1,664
\u2014
\u2014
64
\u2014
1,728
95,668
9,786
6,214
10,892
4,238
126,798
2.4 Liquidity and funding risk continued
Financial liabilities by undiscounted contractual maturity continued (audited)
(Audited)
2023
On
demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial liabilities1,2
Deposits by central banks and banks
22
1,473
\u2014
312
\u2014
1,807
Customer accounts
95,095
5,320
3,016
1,452
29
104,912
Securities financing
\u2014
577
\u2014
\u2014
\u2014
577
Derivative financial instruments
\u2014
275
400
925
411
2,011
Debt securities in issue
\u2014
44
1,018
5,506
3,471
10,039
Subordinated liabilities and other capital instruments
\u2014
\u2014
38
262
1,724
2,024
Other financial liabilities
1,571
\u2014
\u2014
\u2014
\u2014
1,571
96,688
7,689
4,472
8,457
5,635
122,941
1. Excludes trading portfolio financial liabilities of \u20ac 262 million (2023: \u20ac 139 million). The undiscounted contractual maturity for those liabilities in 2024 is: \u20ac 5 million in
<3\u00a0months but not on demand; \u20ac 190 million in 1-5 years and \u20ac 67 million over 5 years.
2. A maturity of lease liabilities is disclosed in note 32.
The undiscounted cash flows potentially payable under guarantees and similar contracts (audited)
The undiscounted cash flows that are potentially payable under guarantees and\u00a0similar contracts, included below within contingent liabilities, are
classified on the basis of the earliest date the facilities can be called. The Group is only called upon to satisfy a guarantee when the guaranteed
party fails to meet their obligations. The Group expects that most guarantees it provides will expire unused. The Group has given commitments to
provide funds to customers under undrawn facilities. The undiscounted cash flows have been classified on the basis of the earliest date that the
facility can be drawn. The Group does not expect all facilities to be drawn, and some may lapse before drawdown. For further details, see note 39
to the Consolidated Financial Statements.\u00a0The following table analyses undiscounted cash flows potentially payable under guarantees and similar
contracts at 31 December 2024 and 2023:
(Audited)
2024
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Contingent liabilities
976
\u2014
\u2014
\u2014
\u2014
976
Commitments
16,823
\u2014
\u2014
\u2014
\u2014
16,823
17,799
\u2014
\u2014
\u2014
\u2014
17,799
(Audited)
2023
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Contingent liabilities
857
\u2014
\u2014
\u2014
\u2014
857
Commitments
16,136
\u2014
\u2014
\u2014
\u2014
16,136
16,993
\u2014
\u2014
\u2014
\u2014
16,993
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-2": { "value": "
Group Credit Risk Framework (audited)
The Group implements and operates policies to govern the
identification, assessment, approval, monitoring and reporting of credit
risk. The Group Credit Risk Framework is the overarching Board
approved document which sets\u00a0out the principles of how the Group
identifies, assesses, approves, monitors and reports credit risk to
ensure that robust credit risk management is in place. This document
contains the minimum standards and principles that are applied across
the Group to provide a common, robust and consistent approach to the
management of credit risk. The Group Credit Risk Framework is
supported by a suite of credit policies, standards and guidelines which
define in greater detail the minimum standards and credit risk metrics to
be applied for specific products, business lines and market segments.
Credit approval overview (audited)
The Group operates credit approval criteria which:
\u2022 Include a clear indication of the Group\u2019s target market(s), in\u00a0line\u00a0with
Group and segment risk appetite statements;
\u2022 Require a thorough understanding and assessment of the borrower
or counterparty, as well as the purpose and structure of credit, and
the source of repayment; and
\u2022 Enforce compliance with minimum credit assessment and facility
structuring standards.
Credit risk approval is undertaken by professionals operating within a
defined delegated authority framework. However, for certain selected
retail portfolios, scorecards and automated strategies (together referred
to as \u2018score enabled decisions\u2019) are deployed to automate and to
support credit decisions and credit management (e.g. score enabled
auto-renewal of overdrafts).
The Board is the ultimate credit approval authority in the Group. The
Board has delegated credit authority to various credit committees and
to the Chief Credit Officer (\u2018CCO\u2019). The CCO is permitted to further
delegate this credit authority to individuals within the Group on a risk
appropriate basis. Credit limits are approved in accordance with the
Group\u2019s risk policies and\u00a0guidelines.
All exposures above certain levels require approval by the Group Credit
Committee (\u2018GCC\u2019) and/or Board. Other exposures are approved
according to a structure of tiered individual authorities which reflect
credit competence, proven judgement and experience. Depending on
the borrower/connection, grade and the level of exposure, limits are
sanctioned by the relevant credit authority. Material lending proposals
are referred to credit units for independent assessment/approval or
formulation of a recommendation and subsequent adjudication by the
applicable approval authority.
The Group also has in place an Interbank Exposure Policy which
establishes the maximum exposure for each counterparty bank,
depending on credit grade rating. Each bank is assessed for the
appropriate maximum exposure limit in line with the policy. Risk
generating business units in each segment are required to have an
approved bank and country limit prior to granting any credit facility, or
approving any credit obligation or commitment which has the potential
to create interbank or country exposure.
ECL governance (audited)
The Board has put in place a framework, incorporating the governance
and delegation structures commensurate with a material risk, to ensure
credit risk is appropriately managed throughout the Group.
The key governance points in the ECL allowance approval process
during 2024 were:
\u2022 Model Risk Committee;
\u2022 Asset and Liability Committee;
\u2022 Business level ECL Forum;
\u2022 Group Credit Committee; and
\u2022 Board Audit Committee.
For ECL governance, the Group\u2019s senior management employ expert
judgement in assessing the adequacy of the ECL allowance. This is
supported by detailed information on the portfolios of credit risk
exposures and by the outputs of the measurement and classification
approaches, coupled with internal and external data provided on both
the short term and long term economic outlook. Business segments
and Group management are required to ensure that there are
appropriate levels of cover for all of the credit portfolios and must take
account of both accounting and regulatory compliance when assessing
the expected levels of loss.
Assessment of the credit quality of each business segment and
subsidiaries is initially informed by the output of the quantitative
analytical models but may be subject to management adjustments.
This ECL output is then scrutinised and approved at individual business
unit level (ECL Forum), which also includes subsidiaries, prior to
onward submission to the GCC.
GCC reviews and challenges ECL levels for onward recommendation
to the Board Audit Committee as the final approval authority. The Board
Audit Committee then recommends the Group\u2019s financial results to the
Board for ultimate final approval.
Credit risk organisation and structure (audited)
The Group\u2019s credit risk management structure operates through
a\u00a0hierarchy of lending authorities. All customer loan requests are
subject to a credit assessment process. The role of the Credit Risk
function is to provide direction, independent oversight of and challenge
to credit risk-taking.
Internal credit ratings (audited)
One of the objectives of credit risk management is to accurately quantify
the level of credit risk to which the Group is exposed through the initial
credit approval and ongoing review process. All\u00a0relevant exposures are
assigned to a rating model and within that to an internal risk grade (rating).
A grade is assigned on the basis of rating criteria within each rating model
from which estimates of probability of default (\u2018PD\u2019) are derived.
Internal credit grades are fundamental in assessing the credit quality of
loan exposures, and for assessing capital requirements for portfolios
where prior regulatory approval has been received. Internal credit
grades are key to management reporting, credit portfolio analysis,
credit quality monitoring and in determining the level and nature of
management attention applied to exposures. Changes in the objective
information are reflected in the credit grade of the borrower/loan with
the resultant grade influencing the management of individual loans. In
line with the Group\u2019s credit management lifecycle, heightened credit
management and special attention is paid to lower quality performing
loans or \u2018criticised\u2019 loans and non-performing/defaulted loans, which are
defined on page 188.
Using internal models, the Group utilises a credit grading masterscale
that gives it the ability to categorise credit risk across different rating
models and portfolios in a\u00a0consistent manner. The masterscale
consolidates complex credit information into a single attribute, aligning
the output from the risk models with the Group\u2019s Forbearance and
Definition of Default and Credit Impairment policies. The masterscale
grades are driven by grading model appropriate through the cycle PDs
combined with other asset quality indicators such as default, forbearance
and arrears in order to provide the Group with a mechanism for ranking
and comparing credit risk associated with a range of customers.
2.1 Credit risk continued
Internal credit ratings continued (audited)
Masterscale categorises loans into a broad range of grades which can be
summarised into the following categories: strong/satisfactory grades;
criticised grades; and non-performing/default loans. The profile of the
Group\u2019s loan portfolio under each of the above grade categories is set out
on page 207.
The IFRS 9 PD modelling approach uses a combination of rating
grades and scores obtained from these credit risk models along with
key factors such as the current/recent arrears status or the current/
recent forbearance status and macroeconomic factors to obtain the
relevant IFRS 9 12 month and Lifetime PDs (i.e. point in time). The
Group has set out its methodologies and judgements exercised in
determining its expected credit loss under IFRS 9 on pages 190 to 201.
Strong/satisfactory (audited)
Accounts are considered strong/satisfactory if they have no current or
recent credit distress and the probability of default is typically less than
6.95%, they are not in arrears and there are no indications that they are
unlikely to repay.
\u2022 Strong (typically with a PD less than 0.99%): Strong credit with no
weakness evident.
\u2022 Satisfactory (typically with a PD greater than or equal to 0.99% and
less than 6.95%): Satisfactory credit with no weakness evident.
Criticised (audited)
Accounts of lower credit quality and considered as less than
satisfactory are referred to as criticised and include the following:
\u2022 Criticised watch: The credit is exhibiting weakness in terms of credit
quality and may need additional management attention; the credit
may or may not be in arrears.
\u2022 Criticised recovery: Includes forborne cases that are classified
as\u00a0performing including those which have transitioned from
non\u2011performing forborne, but still require additional management
attention to monitor for re-default and continuing improvement in
terms of credit quality.
Non-performing/default (audited)
The Group\u2019s definition of default is aligned with the EBA \u2018Guidelines on
the application of the definition of default\u2019 under Article 178 of the
Capital Requirements Regulation and ECB Banking Supervision
Guidance to Banks on non-performing loans.
The Group has aligned the definitions of \u2018non-performing\u2019, \u2018classification
of default\u2019 and IFRS 9 Stage 3 \u2018credit impaired\u2019, with the exception of
loans measured at fair value through profit or loss, and those loans
which have been derecognised and newly originated in Stage 1 or
POCI (purchased or originated credit impaired) which are no longer
classified as credit impaired but continue to be classified as non-
performing and in default. This alignment ensures consistency with the
Group\u2019s internal credit risk management and assessment practices.
Loans are identified as non-performing or defaulted by a number of
characteristics. The key criteria resulting in a classification of non-
performing are:
\u2022 Where the Group considers a borrower to be unlikely to pay their
loans in full without realisation of collateral, regardless of the
existence of any past-due amount; or
\u2022 The borrower is 90 days or more past due on any material loan. Day
count starts when any material amount of principal, interest or fee
has not been paid by a borrower on the due date.
The criteria for the definition of financial distress and forbearance are
included in the Group\u2019s Forbearance Policy. Criteria for the
identification of non-performing exposures and unlikeliness to pay are
included in the Group\u2019s Definition of Default and Credit Impairment
Policy.
Credit risk monitoring (audited)
The Group has developed and implemented processes and information
systems to monitor and report on individual credits and credit portfolios
in order to manage credit risk effectively. It\u00a0is\u00a0the Group\u2019s practice to
ensure that adequate up-to-date credit\u00a0management information is
available to support the credit management of individual account
relationships and the overall loan portfolio.
Credit risk, at a portfolio level, is monitored using key risk indicators
and early warning indicators which are reported regularly to senior
management and to the Board Risk Committee. Credit managers
proactively manage the Group\u2019s credit risk exposures at a transaction
and relationship level. Monitoring includes credit exposure and excess
management, regular review of accounts, being up-to-date with any
developments in customer business, obtaining updated financial
information and monitoring of covenant compliance. This is reported on
a regular basis to senior management and includes information and
detailed commentary on loan book growth, quality of the loan book and
expected credit losses including individual large non-performing exposures.
Changes in sectoral and single name concentrations are tracked on
a\u00a0regular basis highlighting changes to risk concentration in the Group\u2019s
loan book. The Group allocates significant resources to ensure ongoing
monitoring and compliance with approved risk limits. Credit risk,
including compliance with key credit risk limits, is monitored monthly
and is periodically reported to senior management and to the Board
Risk Committee. Once an account has been placed on a watch list, the
exposure is carefully monitored and where appropriate, exposure
reductions are\u00a0effected.
As a matter of policy, non-retail facilities are subject to a review on, at
least, an annual basis, even when they are performing satisfactorily.
Annual review processes are supplemented by more frequent portfolio
and case review processes in addition to arrears or excess
management processes. Borrowers in Stage 2 may be subject to an
\u2018unlikely to pay\u2019 test at the time of annual review, or earlier, if there is a
material adverse change or event in their credit risk profile.
Through a range of forbearance solutions, as outlined on page 229, the
Group employs a dedicated approach to loan workout, monitoring and
proactive management of non-performing loans. A specialised recovery
function focuses on managing the majority of criticised loans and deals
with customers in default, collection or insolvency. Their mandate is to
support customers in\u00a0difficulty while maximising the return on non-
performing loans. Whilst the basic principles for managing weaknesses
in corporate, commercial and retail exposures are broadly similar, the
solutions reflect the differing nature of the assets. Further details on
forbearance are set out in section \u20182.1.6 - forbearance overview\u2019.
Credit risk mitigants (audited)
The perceived strength of a borrower\u2019s repayment capacity is
the\u00a0primary factor in granting a loan. However, the Group uses various
approaches to help mitigate risks relating to individual credits, including
transaction structure, collateral and guarantees. The main types of
collateral for loans and advances to customers are described under the
section on collateral. Credit policy and credit management standards
are controlled and set centrally by the Credit Risk function.
Occasionally, credit derivatives are purchased to hedge credit risk.
Current levels are modest and their use is subject to the normal credit
approval process.
The Group enters into netting agreements for derivatives with certain
counterparties, to ensure that in the event of default, all amounts
outstanding with those counterparties will be settled on a\u00a0net basis.
Depending on the size of the potential exposure derivative transactions
with wholesale counterparties are typically collateralised under a
Credit\u00a0Support Annex in conjunction with the International Swaps and
Derivatives Association (\u2018ISDA\u2019) Master Agreement.
2.1 Credit risk continued
Credit risk mitigants continued (audited)
Collateral (audited)
Credit risk mitigation may include a requirement to obtain collateral as
set out in the Group\u2019s lending policies. Where collateral and/or
guarantees are required, they are usually taken as a secondary source
of repayment in the event of a borrower\u2019s default. The Group maintains
policies which detail the acceptability of specific classes of collateral.
The principal collateral types for loans and advances are:
\u2022 Charges over business assets such as premises, inventory and
accounts receivable;
\u2022 Charges over other assets such as plant and machinery, marine
vessels etc.;
\u2022 Mortgage/legal charge over residential and commercial real estate;
and
\u2022 Charges over financial instruments such as debt securities
and\u00a0equities.
The nature and level of collateral required depends on a number of
factors such as the type of the credit facility, the term of the credit
facility and the amount of exposure. Collateral held as security for
financial assets, other than for loans and advances, is\u00a0determined by
the nature of the instrument. Debt securities and treasury products are
generally unsecured, with the exception of asset backed securities,
which are secured by a portfolio of financial assets.
Collateral is not usually held against loans and advances to banks,
including central banks, except where securities are held as part of
reverse repurchase or securities borrowing transactions or where a
collateral agreement has been entered into under a\u00a0master netting
agreement or where the bank purchases covered bonds as part of its
liquidity portfolio.
For non-mortgage/non-property lending, where collateral is taken, it will
typically include a charge over the business assets such as inventory
and accounts receivable. In some cases, a charge over property
collateral or a personal guarantee supported by a lien over personal
assets may also be taken. Where cash flows arising from the
realisation of collateral held are included in the expected credit loss
assessments, in many cases management rely on valuations or
business appraisals from independent external professionals.
Methodologies for valuing collateral (audited)
Details on the valuation rule methodologies applied and processes
used to assess the value of property assets taken as collateral are
described in the Group Property Valuation Policy and Property
Valuation Guidance. Both documents are subject to an annual review.
As property loans, including residential mortgages, represent
a\u00a0significant concentration within the Group\u2019s loans and advances to
customers portfolio, some key principles have been applied in respect
of the valuation of property collateral held by the Group.
The value of property collateral is assessed at loan origination and\u00a0at
certain stages throughout the credit lifecycle in accordance with the
Group Property Valuation Policy e.g. at annual review, where required.
In accordance with the Group Property Valuation Policy and guidelines,
the Group employs a number of methods to assist in reaching
appropriate valuations for property collateral held:
(a) External valuation firms on the Group\u2019s Valuers Panel, are engaged
by the Group to undertake valuations of immovable property
collateral in accordance with the rules set out in the Group Property
Valuation Policy.
(b) Independent professional internal valuations are completed in
limited circumstances (e.g. agricultural land) using a desktop
valuation approach by professionally qualified internal valuers who
are independent of the credit process in the second line of defence.
The assets being valued by this means must have an independent
professional external valuation completed within the past 3 years.
(c) Internal valuations are completed by the first line of defence
pursuant to the rules in the Property Valuation Policy and in line
with the Property Valuation Guidance, which provides appropriate
valuation methodology guidance. These include the following
valuation methodologies:
(i) Index valuation approach \u2013 used for residential property;
(ii) Comparable valuation approach \u2013 a basic level of valuation
methodology used to value agricultural land or as a sense check for
the valuation of residential, commercial or development land;
(iii) Commercial investment valuation approach \u2013 used for the valuation
of commercial property using the Group\u2019s commercial investment
yield matrices;
(iv) Residual valuation approach \u2013 used for the valuation of
development land or land with development potential; and
(v) Profits valuation approach \u2013 used for the valuation of trading assets
e.g. hotels, licensed premises, convenience stores etc. using the
Group\u2019s stabilised EBITDA matrices.
Collateral and ECLs (audited)
Applying one or a combination of the above methodologies, in line\u00a0with
the Group Property Valuation Policy, has resulted in an appropriate range
of discounts to original collateral valuations, influenced by the nature,
status and year of purchase of the asset. The frequency and availability
of such up-to-date valuations remain a key factor in ECL determination.
Additionally, relevant costs likely to be associated with the realisation of
the collateral are taken into account in the cash flow forecasts. The
spread of discounts is influenced by the type of collateral, e.g. land,
developed land or investment property and also its location.
The\u00a0valuation arrived at, is therefore, a function of the nature of\u00a0the asset.
When assessing the level of ECL allowance required for property loans,
apart from the value to be realised from the collateral, other cash flows,
such as recourse to other assets or sponsor support, are also
considered, where available. The other key driver is the time it takes to
receive the funds from the realisation of collateral. While this depends
on the type of collateral and the stage of its development, the period of
time to realisation is typically one to five years but sometimes this time
period is exceeded. These estimates are periodically reassessed on a
case by case basis.
When undertaking an ECL review for individually assessed cases that
have been deemed unlikely to pay, the present value of future cash
flows, including the value of collateral held, and the likely time required
to realise such collateral is estimated. An ECL allowance is raised for
the difference between this present value and the carrying value of the
loan. When multiple discounted cash flows are captured where the
gross credit exposure is \u2265 \u20ac 5 million (Republic of Ireland) or \u2265 \u00a3 5
million (UK) or cases in scope for the Group Leveraged Lending Policy,
the value of collateral is adjusted to reflect the impacts of up and
downside scenarios for these higher value exposures.
Securities financing (audited)
In addition to the credit risk mitigants, the Group, from time to time, enters
securities financing transactions. Securities financing consists of securities
borrowing transactions, reverse repurchase agreements and securities
sold under agreements to repurchase. At 31\u00a0December 2024, the total fair
value of the collateral received was \u20ac 6,643 million (2023: \u20ac 6,466 million)
in relation to reverse repurchase agreements and securities borrowing
transactions (note 19 to the consolidated financial statements).
Derivatives (audited)
Derivative financial instruments are recognised in the statement of
financial position at their fair value. Those with a positive fair value
are\u00a0reported as assets which at 31 December 2024 amounted to
\u20ac\u00a02,144 million (2023: \u20ac 2,377 million) and those with a negative fair
value are reported as liabilities which at 31 December 2024 amounted
to \u20ac1,807 million (2023: \u20ac 1,902 million).
The enforcement of netting agreements would potentially reduce the
statement of financial position carrying amount of derivative assets and
liabilities by \u20ac 1,385 million at 31 December 2024 (2023: \u20ac 1,556
million). The Group also has Credit Support Annexes (\u2018CSAs\u2019) in place
which provide collateral for derivative contracts. At 31 December 2024,\u00a0
\u20ac 698 million (2023: \u20ac 713 million) of CSAs are included within financial
assets as collateral for derivative liabilities and \u20ac 814 million (2023:
\u20ac\u00a0839 million) of CSAs are included within financial liabilities as
collateral for derivative assets (note 38 to the consolidated financial
statements). Additionally, the Group has agreements in place which
may allow it to net the termination values of cross currency swaps upon
occurrence of an event of default.
Risk transfer (audited)
The Group also uses other credit risk mitigation and protection
techniques such as credit risk transfers to optimise exposure to credit
risk and reduce potential credit losses associated with credit events,
such as defaults or downgrades in credit quality. At a portfolio level,
credit risk is accessed in relation to the degree of single name, sectoral
asset class and geographic concentrations. In order to manage credit
risk exposure in the event of emerging risk concentrations, the risk
capital implications are assessed and, where appropriate, risk transfer
options (e.g. loan disposals, securitisations etc.) are considered.
In November 2024, the Group entered into a Significant Risk Transfer
(\u2018SRT\u2019) on a portfolio of \u20ac 1 billion corporate loan assets. This
transaction reduces the Group\u2019s credit risk exposure, and consequently
the risk weighted assets on the reference portfolio of loan assets,
through a risk sharing structure whereby the buyers of the notes
assume the credit risk for \u20ac 97.5 million of potential credit losses on the
reference portfolio of loan assets in return for an annual coupon.
No assets were derecognised from the Group\u2019s balance sheet. The
reference portfolio of loan assets and related customer relationships
continue to be maintained by the Group.
Measurement, methodologies and judgements
Introduction (audited)
The Group has set out the methodologies used and judgements
exercised in determining its expected credit loss allowance for the year
to 31 December 2024.
The Group, in estimating its ECL allowance does so in line with the
expected credit loss impairment model as set out by the International
Financial Reporting Standard 9 Financial Instruments (\u2018the standard\u2019).
This model requires a timely recognition of ECL across the Group.
The\u00a0standard does not prescribe specific approaches to be used in
estimating ECL allowance, but stresses that the approach must reflect
the following:
\u2022 An unbiased and probability weighted amount that is determined by
evaluating a range of possible outcomes;
\u2022 Underlying models should be point in time and forward looking \u2013
recognising economic conditions;
\u2022 The ECL must reflect the time value of money;
\u2022 A lifetime ECL is calculated for financial assets in Stages 2 and 3 and
Purchased or Originated Credit Impaired (\u2018POCI\u2019); and
\u2022 The ECL calculation must incorporate reasonable and supportable
information that is available without undue cost or effort at the
reporting date about past events, current conditions and forecasts of
future economic conditions.
The standard defines credit loss as the difference between all
contractual cash flows that are due to an entity in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all
cash shortfalls), discounted at the original effective interest rate (\u2018EIR\u2019)
or an approximation thereof.
ECLs are defined in the standard as the weighted average of credit
losses across multiple macroeconomic scenarios, with weights
assigned based on the probability of each scenario occurring and are
an estimate of credit losses over the life of a\u00a0financial instrument.
The ECL model applies to financial instruments measured at amortised
cost or at fair value through other comprehensive income. In addition,
the ECL approach applies to lease receivables, loan commitments and
financial guarantee contracts that are not measured at fair value
through profit or loss.
A key principle of the ECL model is to reflect any relative deterioration or
improvement in the credit quality of financial instruments occurring (e.g.
change in the risk of a default). The\u00a0ECL amount recognised as a loss
allowance or provision depends on the extent of credit deterioration since
initial recognition together with the impact on credit risk parameters.
Bases of measurement (audited)
Under the standard, there are two measurement bases:
1. 12-month ECL (Stage 1), which applies to all financial instruments
from initial recognition as long as there has been no significant
increase in credit risk; and
2. Lifetime ECL (Stages 2 and 3 and POCI), which applies when a
significant increase in credit risk has been identified on an account
(Stage 2), an account has been identified as being credit-impaired
(Stage 3) or when an account meets the POCI\u00a0criteria.
Staging (audited)
Financial assets are allocated to stages dependent on credit quality
relative to when assets were originated. A financial asset, including
financial assets acquired by the Group, can only originate in either
Stage 1 or POCI.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Credit risk at origination (audited)
Credit risk at origination (\u2018CRAO\u2019) is a key input into the staging allocation
process. The origination date of an account is determined by the date on
which the Group became irrevocably committed to the contractual
obligation and the account was first graded on an appropriate model.
For undrawn credit facilities, the Group uses the date of origination as the
date when it becomes party to the irrevocably contractual arrangements
or irrevocable commitment. For overdrafts which have both drawn and
undrawn components, the date of origination is the same for both. The
Group uses best available information for facilities which originated
prior to a credit risk rating model or scorecard being in\u00a0place.
For accounts that originated prior to 1 January 2018, a neutral view of
the macroeconomic outlook at the time is used, i.e. where
macroeconomic variables are used in the Lifetime PD models, long-run
averages are used instead of historical forecasts.
Stage 1 characteristics (audited)
Obligations are classified Stage 1 at origination or at acquisition by the
Group, unless POCI, with a 12 month ECL being recognised. These
obligations remain in Stage 1 unless there has been a significant
increase in credit risk.
Accounts can also return to Stage 1 if they no longer meet either the
Stage 2 or Stage 3 criteria, subject to satisfaction of the appropriate
probation periods, in line with regulatory requirements.
Stage 2 characteristics (audited)
Obligations where there has been a \u2018significant increase in credit
risk\u2019 (\u2018SICR\u2019) since initial recognition but do not have objective evidence
of credit impairment are classified as Stage 2. For these assets, lifetime
ECLs are recognised.
The Group assesses at each reporting date whether a significant
increase in credit risk has occurred on its financial obligations since their
initial recognition. This assessment is performed on individual
obligations rather than at a portfolio level. If the increase is considered
significant, the obligation will be allocated to Stage 2 and a lifetime
expected credit loss will apply to the obligation. If the change is not
considered significant, a 12 month expected credit loss will continue to
apply and the obligation will remain in Stage 1.
SICR assessment (audited)
The Group\u2019s SICR assessment is determined based on both
quantitative and qualitative measures:
Quantitative measure: This measure reflects an arithmetic assessment
of the change in credit risk arising from changes in the probability of
default. The Group compares each obligation\u2019s annualised average
probability weighted residual origination lifetime probability of default
(\u2018LTPD\u2019) (see \u2018Credit risk at origination\u2019 above) to its current estimated
annualised average probability weighted residual LTPD at the reporting
date. If the difference between these two LTPDs meets the quantitative
definition of SICR, the Group transfers the financial obligation
into\u00a0Stage 2. Increases in LTPD may be due to credit deterioration of
the individual obligation or due to macroeconomic factors or
a\u00a0combination of both. The Group has determined that an account had
met the quantitative measure if the average residual LTPD at\u00a0the
reporting date was at least double the average residual LTPD at
origination, and the difference between the LTPDs was at least 50bps
or 85bps in the case of residential mortgages. The appropriateness of
this threshold is kept under review by the\u00a0Group.
Qualitative measure: This measure reflects the assessment of the
change in credit risk based on the Group\u2019s credit management and the
individual characteristics of the financial asset. This is not model driven
and seeks to capture any change in credit quality that may not be
already captured by the quantitative criteria.
The qualitative assessment reflects pro-active credit management
including monitoring of account activity on an individual or portfolio
level, knowledge of client behaviour, and cognisance of industry and
economic trends.
The criteria for this qualitative trigger include, for example:
\u2022 A downgrade to watch grade of the borrower\u2019s/facility\u2019s credit grade
reflecting the increased credit management focus on these accounts;
and/or
\u2022 Forbearance has been provided and the account is within the
probationary period.
\u2022 Lender assessed SICR triggers: For non-retail portfolios, a suite of
lender assessed triggers are in place to ensure appropriate and
timely identification of increased credit risk, which when occur, trigger
a SICR event.
The criteria for this lender assessed trigger include, for example:
\u2022 A post distressed restructure payment default occurs where the
borrower is neither in default nor forborne;
\u2022 A material adverse event has occurred for the borrower which may
impact the borrower\u2019s ability to repay such as: adverse publicity
which raises concerns over the viability of a business; loss of key
personnel (CEO/CFO/COO) which raises concerns over the strategy/
viability of the business or significant negative macroeconomic
events (including but not limited to economic or market volatility,
changes in legislation and technological threats to an industry,
changes in access to markets) where the financial impact to the
borrower is deemed material.
\u2022 Backstop indicators: The Group has adopted the rebuttable
presumption within IFRS 9 that loans greater than 30 days past due
represent a significant increase in credit risk.
Where SICR criteria are no longer a trigger, the account can exit Stage
2 and return to Stage 1.
Stage 3 characteristics (audited)
Defaulted loans (with the exception of newly originated or acquired
loans that are in Stage 1 or POCI) are classed as credit impaired and
allocated to Stage 3. Where default criteria are no longer met, the
borrower exits Stage 3 subject to a probation period, in line with
regulatory requirements.
The key criteria resulting in a classification of default are:
\u2022 Where the Group considers a borrower to be unlikely to pay their
loans in full without realisation of collateral, regardless of the
existence of any past-due amount; or
\u2022 The borrower is 90 days or more past due on any material loan (day
count starts when any material amount of principal, interest or fee
has not been paid by a borrower at the date it was due).
Identification of non-performing exposures and unlikeliness to pay are
included in the Group\u2019s Definition of Default and Credit Impairment Policy.
Purchased or originated credit impaired (\u2018POCI\u2019) (audited)
POCIs are assets originated credit impaired and have a discount to the
contractual value when measured at fair value. The Group uses an
appropriate discount rate for measuring ECL in the case of POCIs which
is the credit-adjusted effective interest rate. This rate is used to discount
the expected cash flows of such assets to fair value on initial recognition.
POCI obligations remain outside of the normal stage allocation process
for the lifetime of the obligation. The ECL for POCI obligations is always
measured at an amount equal to lifetime expected credit losses. The
amount recognised as a loss allowance for these assets is the
cumulative change in lifetime expected credit losses since the initial
recognition of the assets rather than the total amount of lifetime
expected credit losses.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Measurement of expected credit loss (audited)
The measurement of ECL is estimated through one of the following
approaches:
(i) Standard approach: This approach is used for the majority of
exposures where each ECL input parameter (Probability of Default
\u2013 PD, Loss Given Default \u2013 LGD, Exposure at Default \u2013 EAD, and
Prepayments \u2013 PP) is developed in line with standard modelling
methodology. The Group\u2019s IFRS 9 models have been developed
and approved in line with the Group\u2019s Model Risk Management
Framework.
(ii) Simplified approach: For portfolios not on the standard approach,
the Group has followed a simplified approach. This approach
consists of applying portfolio level ECL averages, drawn from
similar portfolios, where it is not possible to estimate individual
parameters. These generally relate to portfolios where specific
IFRS 9 models have not been developed due to immateriality, low
volumes or where there are no underlying grading models. As
granular PDs are not available for these portfolios, a non-standard
approach to staging is required with reliance on the qualitative
criteria (along with the 30 days past due back-stop).
(iii) Discounted cash-flows (\u2018DCFs\u2019): Assets are grouped together and
modelled based on asset classification and sector with the
exception of those Stage 3 assets where a DCF is used. DCFs are
used as an input to the ECL calculation for Stage 3 credit impaired
exposures where gross credit exposure is \u2265 \u20ac 1 million (Republic of
Ireland) or \u2265 \u00a3 500,000 (UK). Multiple DCFs are captured where
gross credit exposure is \u2265 \u20ac 5 million (Republic of Ireland) or \u2265
\u00a3\u00a05\u00a0million (UK) or cases in scope for the Group Leveraged Lending
Policy, to reflect the case specific impacts of up and downside
scenarios for these higher value exposures.
Collateral valuations and the estimated time to realisation of
collateral is a key component of the DCF model. The Group
incorporates forward looking information in the assessment
of\u00a0individual borrowers through the credit assessment process.
Where a single DCF is utilised this assessment produces a\u00a0base
case ECL. This is then adjusted to incorporate the impact of
multiple scenarios on the base ECL, by using a proportional uplift
obtained from ECL modelled sensitivities in the same/similar
portfolio. Where a range of scenarios are captured through multiple
DCFs these are probability weighted to produce the final ECL. An
adjustment is made for cases with\u00a0a very low final ECL to ensure a
minimum level of ECL is maintained, this is derived through
reference to ECL model\u00a0outputs.
(iv) Management judgement: Where the estimate of ECL does not
adequately capture all available forward looking information about
the range of possible outcomes, or where there is a significant
degree of uncertainty, management judgement may be considered
appropriate for an adjustment to ECL. The management adjustment
must consider all relevant and supportable information, including
but not limited to, historical data analysis, predictive modelling and
management experience. The methodology to incorporate the
adjustment should consider the degree of any relevant over
collateralisation (headroom) and should not result in a zero overall
ECL unless there is sufficient headroom to support this. The key
judgements in the 2024 year end ECL estimates are outlined on
pages 200 and 201.
Effective interest rate (audited)
The ECL must incorporate the time value of money discounted to the
reporting date using the effective interest rate (\u2018EIR\u2019) determined at
initial recognition or an approximation thereof.
\u2022 The Group uses an approximation approach based on the account
level interest rate when calculating ECL which is applied to both
drawn and undrawn commitments.
\u2022 This approach is subject to an annual assessment that all
approximations remain appropriate and do not result in a\u00a0material
misstatement of the ECL.
\u2022 The Group has tested the appropriateness of using current interest
rates as an approximation for the discount rates required for
measuring ECLs. This testing determined that using the current
interest rates as the discount rates is an appropriate approximation.
Policy elections and simplifications
Low credit risk exemption (audited)
The Group utilises practical expedients, as allowed by IFRS 9, for the
stage allocation of particular financial instruments which are deemed
\u2018low credit risk\u2019. This practical expedient permits the Group to assume,
without more detailed analysis, that the credit risk on a financial
instrument has not increased significantly since initial recognition if the
financial instrument is determined to have \u2018low credit risk\u2019 at the
reporting date. The Group allocates such assets to Stage 1.
Under IFRS 9, the credit risk on a financial instrument is considered low\u00a0if:
\u2022 the financial instrument has a low risk of default;
\u2022 the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term; and
\u2022 adverse changes in economic business conditions in the longer term
may, (but will not necessarily) reduce the ability of the borrower to
fulfil its contractual cash flow obligations.
This low credit risk exemption is applied to particular assets within the
Treasury Debt Securities Portfolio, Capital Markets Collateralised Loan
Obligation Bonds and for Loans and Receivables to Banks, specifically
assets which have an internal grade equivalent to an external
investment grade rating (BBB-) or\u00a0higher.
The Group applies a quantitative backstop trigger of tripling of probability
of default subject to a minimum threshold movement of 30bps to
determine whether assets subject to the low credit risk exemption should
be allocated to Stage 2. Additionally, if any of such assets are on a watch
list based on agreed criteria, they are allocated to Stage 2.
Short term cash (audited)
The Group\u2019s IFRS 9 Impairment Policy does not require calculation of
an ECL for short term cash at central banks and other banks which
have a low risk of default with a very low risk profile. The calculation of
the ECL at each reporting date would be immaterial given these
exposures\u2019 short term nature and their daily management.
Lease receivables and trade receivables (audited)
For lease receivables, the Group has elected to use its standard
approach for both stage allocation and the ECL calculation and has
elected to use an expedient (simplified approach) for trade\u00a0receivables.
IFRS 9 ECL Credit Risk models (audited)
The IFRS 9 ECL models provide the risk parameters which are the
inputs into the model driven estimate of ECL which is used across all
Stage 1 and Stage 2 assets plus all non-DCF Stage 3 exposures on the
standard approach to ECL.
IFRS 9 Portfolio Delineation (audited)
The IFRS 9 models are delineated into retail and non-retail portfolios.
The retail IFRS 9 portfolios provide exposure level risk parameter
estimates which take into account borrower level characteristics and
metrics where appropriate, whilst the non-retail portfolios provide
metrics which are either borrower or connection level estimates.
Probability of default (audited)
Probability of default (\u2018PD\u2019) is the likelihood that an account or borrower
defaults over an observation period, given that they are not currently in
default, for each year of the expected contractual lifetime of the
exposure. The PD is a point in time estimate which is reflective of the
current and expected economic conditions.
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Probability of default continued (audited)
In order to capture the appropriate risk dynamics across the lifetime of
the exposure the development process considers:
\u2022 Macroeconomic effects captured through factors such as
unemployment rate and GDP;
\u2022 Cross-sectional risk discriminators in particular the internal rating
model outputs plus other factors such as forbearance and\u00a0days past
due; and
\u2022 Seasoning factors such as product type, delinquency and
forbearance status.
Loss given default (audited)
Loss given default (\u2018LGD\u2019) is a current assessment of the amount that
will not be recovered in the event of default, taking account of future
conditions. It can be thought of as the difference between the amount
owed to the Group (i.e. the exposure) and the net present value of
future cash flows less any relevant costs expected to be incurred in the
recovery process. If an account returns to performing from default
(excluding any loss making concession) or if the discounted post-
default recoveries are equal to or greater than the exposure, the
realised loss is zero.
The LGD modelling approach depends on whether the facility has
underlying security and, if so, the nature of that security. The following
sets out the general approaches for the retail and non-retail portfolios:
\u2013 Retail portfolios
For unsecured loans, a cash flow curve, which estimates the
cumulative cash received following default until the loan is written-
off or returns to performing, is used to estimate the future recovery
amount. This is discounted at the effective interest rate and
compared to the current outstanding balance. Any shortfall between
the recovery amount and the outstanding balance is the LGD used
to estimate ECL. Where appropriate, this may then be adjusted to
reflect economic conditions.
For secured loans the following may be considered:
\u2022 The value of underlying collateral is estimated at the forecasted
time of disposal (taking into account forecasted market price
growth/falls and haircuts on market values that are expected at the
date of sale plus associated costs) in order to calculate the future
recovery amount;
\u2022 The potential for the exposure to be deleveraged through a portfolio
sale taking into account the costs associated with same; and
\u2022 Paths for returning to the performing portfolios such as
forbearance and self-cure.
\u2013 Non-retail portfolios
For unsecured loans, characteristics such as borrower sector and
nature of collateral linked to affiliated accounts under the same
customer group are used to determine future losses based on
historical experience of discounted recoveries.
For secured loans, the value of the underlying property collateral is
estimated at the reporting date. This is used to estimate the ECL
based on historical experience of discounted recoveries.
Exposure at default (audited)
Exposure at default (\u2018EAD\u2019) is defined as the exposure amount that
will\u00a0be owed by a customer at the time of default. This will comprise
changes in the exposure amount between the reporting date and the
date that the customer defaults. This may be due to repayments,
interest and fees charged and additional drawdowns by the customer.
Prepayments (audited)
For term credit products, prepayment occurs where a customer fully
prepays an account prior to the end of its contractual term.
For\u00a0revolving credit products, \u2018prepayment\u2019 is defined as the cessation
of use and withdrawal of the facility provided that the account was not
in default prior to closure.
Prepayment is used in the lifetime ECL calculation for Stage 2 loans to
account for the proportion of the facilities/customers that prepay each\u00a0year.
Determining the period over which to measure ECL (audited)
Both the origination date and the expected maturity of a facility must be
determined for ECL purposes. The origination date is used to measure
credit risk at origination.
The expected maturity is used for assets in Stage 2, where the ECL
must be estimated over the remaining life of the facility.
The expected maturity approach is:
\u2022 Term credit products: the contractual maturity date, with exposure
and survival probability adjusted to reflect behaviour i.e. amortisation
and prepayment;
\u2022 Revolving credit products: the period may extend beyond the
contractual period over which the Group is exposed to credit risk,
e.g. overdrafts and credit cards. The Group\u2019s approach is to use a
modelled behavioural life estimate for these obligations for ECL
calculation purposes.
Forward looking indicators in the models (audited)
For ECL calculations reliant on models in the standard and simplified
approaches, forward looking indicators are incorporated into the models
through the use of macroeconomic variables. These have been identified
statistically as the key macroeconomic variables that drive the parameter
being assessed (e.g. PD or LGD). The final model structure incorporates
these as inputs with the 12 month and lifetime calculations utilising the
macroeconomic forecasts for each scenario. See the \u2018macroeconomic
scenarios and weightings\u2019 section for more detail on the process for
generating scenarios and associated key macroeconomic factors relevant
for\u00a0the models. In circumstances where there is a risk that the modelled
output fails to capture the appropriate response to changes in the
macroeconomic environment such as inflation and interest rate changes,
these risks are captured through the use of post model adjustments.
Write-offs (audited)
When the prospects of recovering a loan, either partially or fully, do not
improve, a point may come when it will be concluded that as there is no
realistic prospect of recovery, the loan and any related ECL will be
written-off. The Group determines, based on\u00a0specific criteria, the point
at which there is no reasonable expectation of recovery. When the
following criteria exist (or comparable circumstances arise), the loan
can be subject to a\u00a0partial or full write-off:
\u2022 A decision has been taken to enforce on a loan, due to no agreement
with the customer for a restructure/settlement and all customer
engagement with the Group regarding their loan agreement has ceased;
\u2022 Inception of informal insolvency proceedings has commenced or is
about to commence;
\u2022 Receivership or other formal recovery action (e.g. where expectation
of recovery of collateral is expected through enforcement activity but
no additional recoveries above the collateral value are anticipated)
has commenced or is about to commence; and
\u2022 A loan is substantially provided for or no material repayments have
been received for a period of time (minimum 12 months) and all
customer engagement with the Group regarding their loan
agreement has ceased.
Debt forgiveness may subsequently arise where there is a formal
contract with the customer for the write-off of the loan. In addition,
certain forbearance solutions and restructuring agreements may include
an element of debt write down (debt forgiveness). Further details on
forbearance are set out in section \u20182.1.6 - forbearance overview\u2019.
The contractual amount outstanding of loans written-off during the year
that are still subject to enforcement activity are outlined on page 218 and
relate to non-contracted write-offs, both full and partial. The Group
recognises cash received from the customer in excess of the carrying
value of the loan after a non-contracted write-off as \u2018recoveries of
amounts previously written-off\u2019 in the income statement.
Sensitivities (audited)
The Group\u2019s estimates of expected credit losses are responsive
to\u00a0varying economic conditions and forward looking information. These
estimates are driven by the relationship between historic experienced
loss and the combination of macroeconomic variables. Given the co-
relationship of each of the macroeconomic variables to one another
and the fact that loss estimates do not follow a linear path, a sensitivity
to any single economic variable is not meaningful. As such, the
following sensitivities provide an indication of ECL movements that
include changes in model estimates and quantitative SICR staging
assignments, with a single 100% weighting applied individually.
Increased sensitivity for the Downside 2 \u2018Credit crunch\u2019 scenario is
evident in the 2024 sensitivities compared to the Reported ECL and
100% Base, driven predominantly by underlying model and staging
sensitivities (including the redeveloped corporate models and an
element of macro sensitive PMA allocation where relevant). Further
details on post model adjustments are outlined on pages 200 and 201.
Relative to the Base scenario, in the 100% Downside \u2018Geopolitical
tensions\u2019 and \u2018Credit crunch\u2019 scenarios, the ECL allowance increases
by\u00a030% and 64%, respectively. In the 100% Upside scenario, the ECL
allowance declines by 6%. At 31\u00a0December 2024, a 100% Downside
\u2018Geopolitical tensions\u2019 and \u2018Credit crunch\u2019 scenario sees a higher ECL
allowance sensitivity of \u20ac 373 million and \u20ac 794 million respectively
compared to Base (\u20ac\u00a0214 million and \u20ac 635 million respectively
compared to the Reported ECL). Lower relative impacts are observed
for the\u00a0AIB\u00a0UK\u00a0portfolio.
ECL allowance at 31 December 2024
Reported
100% Base
100% Downside
Scenario 1
(\u2018Geopolitical
tensions\u2019)
100% Downside
Scenario 2
(\u2018Credit crunch\u2019)
100% Upside
Scenario
(\u2018Quick recovery\u2019)
Loans and advances to customers (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Residential mortgages
270
241
304
464
223
Other personal
137
128
145
167
124
Property and construction
464
410
569
689
384
Non-property business
473
415
535
636
393
Total
1,344
1,194
1,553
1,956
1,124
Off-balance sheet loan commitments
44
36
46
60
34
Financial guarantee contracts
13
12
16
20
12
1,401
1,242
1,615
2,036
1,170
Of which:
AIB UK segment
174
160
192
206
151
ECL allowance at 31 December 2023
Reported
100% Base
100% Downside
Scenario 1
(\u2018Persistent
inflation\u2019)
100% Downside
Scenario 2
(\u2018Credit crunch\u2019)
100% Upside
Scenario
(\u2018Quick recovery\u2019)
Loans and advances to customers (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Residential mortgages
309
291
329
540
262
Other personal
97
94
98
119
90
Property and construction
541
501
567
796
433
Non-property business
573
543
618
749
490
Total
1,520
1,429
1,612
2,204
1,275
Off-balance sheet loan commitments
43
37
44
65
32
Financial guarantee contracts
16
16
17
26
15
1,579
1,482
1,673
2,295
1,322
Of which:
AIB UK segment
221
214
232
233
208
2.1 Credit risk continued
Measurement, methodologies and judgements continued
Post model adjustments (\u2018PMAs\u2019) (audited)
Post model adjustments (\u2018PMAs\u2019) are applied where management
believe that they are necessary to ensure an adequate level of ECL
provision and to address known model limitations and/or novel risks not
captured in the models. They may also be used where models are
being redeveloped but are not yet deployed, where the impact of
introducing the new models can be accurately quantified.
PMAs are approved through the ECL governance process within which
the appropriateness of PMAs is considered against the backdrop of the
risk profile of the loan book, recent loss history or changes in
underlying resolution strategies not captured in the models and
management\u2019s view of novel risks. Release of PMAs will occur as new
models are deployed or where the risk has been judged by
management to be captured in the modelled outcomes, or to have
passed.
The PMAs approved for 31 December 2024 (and 2023 comparison),
are set out below and are categorised as follows:
\u2022 NPE resolution \u2013 ECL adjustments where the current model does
not take into account downside risks that should be incorporated into
the final loss estimate.
\u2022 Sectoral/Emerging risks \u2013 ECL adjustments which reflect novel
risks within a sector or portfolio for which there has not been time to
embed an adjustment within the related models or where the models
are incapable of differentiating the nuanced sectoral impacts of each
novel risk.
\u2022 Future model developments/Other \u2013 ECL adjustments required
where the impact of upcoming model changes or recalibrations
is\u00a0known with sufficient accuracy and ECL\u00a0adjustments where it was
judged that an amendment to the\u00a0modelled ECL was required for
reasons other than the above.
2024
Post model adjustments
(audited)
ECL allowance
before PMAs
NPE resolution
Sectoral/
Emerging risks
Future model
developments/
Other1
Total PMAs
Total ECL
allowance
Proportion of
PMAs to total
ECL allowance
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
%
Residential mortgages
222
48
\u2014
\u2014
48
270
18
Other personal
125
12
\u2014
\u2014
12
137
9
Property and construction
234
76
60
94
230
464
50
Non-property business
410
6
3
54
63
473
13
Total loans and advances to
customers
991
142
63
148
353
1,344
26
Loan commitments and
financial guarantees issued
57
\u2014
\u2014
\u2014
\u2014
57
\u2014
Total ECL allowance
1,048
142
63
148
353
1,401
25
2023
Post model adjustments
(audited)
ECL allowance
before PMAs
NPE resolution
Sectoral/
Emerging risks
Future model
developments/
Other1
Total PMAs
Total ECL
allowance
Proportion of
PMAs to total
ECL allowance
\u20ac m\u00a0 \u00a0
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
%
Residential mortgages
229
58
22
\u2014
80
309
26
Other personal
97
\u2014
\u2014
\u2014
\u2014
97
\u2014
Property and construction
259
113
149
20
282
541
52
Non-property business
401
29
15
128
172
573
30
Total loans and advances to
customers
986
200
186
148
534
1,520
35
Loan commitments and
financial guarantees issued
59
\u2014
\u2014
\u2014
\u2014
59
\u2014
Total ECL allowance
1,045
200
186
148
534
1,579
34
1. The Capital Markets non-property business PMA of \u20ac 34 million at 31 December 2024 has been recategorised from 'Sectoral/Emerging risks' to 'Future model
development/Other' and the 31 December 2023 comparative (\u20ac 47 million) has also been re-presented to reflect this change.
NPE resolution (audited)
A PMA of \u20ac 58 million was implemented at 31 December 2023 on
Stage\u00a03 mortgages, primarily to address potential ECL underestimation
from higher yields\u00a0in the current interest rate environment impacting
portfolio sale assumptions within the mortgage model and uncertainty
of the timing to transact\u00a0NPE mortgage portfolio sales. During 2024,
\u20ac10 million of this PMA was released due to the deployment of model
enhancements and a reduction in interest rates versus the\u00a0original
PMA, with \u20ac 48 million retained at 31\u00a0December 2024.
Within the Retail Banking personal lending Stage 3 portfolio, a new
PMA of \u20ac\u00a012\u00a0million was introduced at 31 December 2024 to reflect the
experience of recent loan sale transactions for similar portfolios not
currently captured in the modelled outcomes.
PMAs relating to non-performing property (\u20ac\u00a076\u00a0million) and
non\u2011property business (\u20ac 6 million) loans reflect an adjustment to
account for latent risks, idiosyncratic concentration risk, and alternative
resolution strategies, such as NPE portfolio loan sales. This PMA is to
address the potential range of ECL outcomes depending on the
ultimate resolution type. At\u00a031 December 2024, this PMA reflects the
potential reduction in asset values, particularly within commercial real
estate and potential impacts from NPE portfolio loan sales. There has
been a partial unwind of this PMA in the year where the risk has now
been captured through an update to\u00a0valuations or where borrowings
have been repaid. This PMA is expected to unwind over time as
Stage\u00a03 property cases are resolved and the property market
uncertainty reduces.
(audited)
At 31 December 2024, previous PMAs in this category relating to
inflationary pressures / cost of living have been largely unwound and
are now reflected in the modelled outcomes. This also applies to risks
relating to higher interest rates which have eased, with portfolio
performance remaining strong at current levels. However, a new PMA
of \u20ac 56 million was introduced to address model and novel risks and
specifically relates to the latent risk of potential forbearance activity.
This PMA predominately relates to the commercial real estate Stage 2
portfolio.
Within AIB UK, a PMA of \u20ac 7 million (\u20ac 1 million non-property business
and \u20ac 6 million property) is in place to reflect the full expected impact of
the external environment, including interest rate and property market
dynamics. This PMA has reduced in the year as the risks have been
captured in the modelled outcomes or assessed to have moderated.
Future model developments/Other (audited)
Within the Capital Markets property portfolio, the recalibrated
investment property model scheduled for deployment in the first half of
2025 is expected to result in additional exposures migrating to Stage 2.
At 31 December 2024, a new PMA of \u20ac 90 million was introduced to
reflect the potential increase in Stage 2 balances and associated ECL
levels. This PMA also includes the impact of a staging adjustment to
transfer \u20ac 0.2 billion of Stage 1 loans to Stage 2. This PMA will unwind
over the 12 months post implementation, as cases are regraded and
migrate to Stage 2 as appropriate.
The Capital Markets non-property business PMA (\u20ac 34 million)
continues to reflect the potential impact of inflation (including higher
energy costs), high interest rates on non-property business, and an
assessment that the modelled probabilities of default do not fully
capture the expected credit losses. The PMA has been retained at a
reduced level for 31 December 2024 reflecting resilient performance of
the underlying portfolios and implementation of the recalibrated IFRS 9
models which better capture the underlying risk. This PMA adjustment
has been reclassified in the year from 'Sectoral/Emerging risks' to
'Future model developments/Other' as this PMA is expected to unwind
further in the second half of 2025 if satisfactory performance continues
and as cases are regraded on the recalibrated models. \u00a0
For the Syndicated and International Finance (\u2018SIF\u2019) portfolio in Capital
Markets, it was previously determined that historically observed
relationships between default rates and macroeconomic factors in the
modelled probabilities of default do not fully capture the expected credit
losses and therefore needed to be increased for this portfolio. The PMA
has been retained at a reduced level for 31 December 2024 at \u20ac 11
million reflecting the implementation of the recalibrated IFRS 9 models.
This PMA is expected to unwind further in the second half of 2025 if
satisfactory performance continues and all elements of the updated
models are fully deployed.
Within AIB UK, a PMA of \u20ac 8 million has been retained at 31 December
2024 and relates to AIB Group\u2019s decision to continue its exit strategy in
respect of a cohort of legacy loans.
Other PMAs amounting to a further \u20ac 5 million in this category are not
individually significant.
2023
Statement of financial position
Maximum Exposure
Maximum exposure to credit risk (audited)
Exposure
ECL
allowance
Carrying
amount
Amortised
cost
Fair value
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cash and balances at central banks
38,018
\u2014
38,018
1
37,420
\u2014
37,420
1
Derivative financial instruments
2,377
\u2014
2,377
\u2014
2,377
2,377
Loans and advances to banks
1,329
\u2014
1,329
1,329
\u2014
1,329
Loans and advances to customers
67,011
(1,520)
65,491
65,449
42
65,491
Securities financing
6,467
(1)
6,466
6,466
\u2014
6,466
Investment securities2
17,001
(3)
16,998
4,510
12,488
16,998
Trading portfolio financial assets
93
\u2014
93
\u2014
93
93
Included elsewhere:
Trade receivables
102
(1)
101
101
\u2014
101
Items in course of collection
42
\u2014
42
42
\u2014
42
Accrued interest
396
\u2014
396
396
\u2014
396
132,836
(1,525)
131,311
115,713
15,000
130,713
Loan commitments and other credit
related commitments
16,136
(43)
(43)
16,136
\u2014
16,136
Financial guarantees
857
(16)
(16)
857
\u2014
857
16,993
3
(59)
(59)
16,993
\u2014
16,993
Total
149,829
(1,584)
131,252
132,706
15,000
147,706
1. Comprises balances at central banks of \u20ac 37,420 million and other cash on hand of \u20ac 598 million.
2. Excluding equity shares of \u20ac 355 million.
3. Comprises off-balance sheet instruments.
Internal credit grade profile by ECL staging (audited)
The table below analyses the internal credit grading profile by ECL staging for the Group\u2019s loans and advances to customers at 31 December 2024
and 2023:
Amortised cost (audited)
2024
2023
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Total
Strong
45,774
2,593
\u2014
40
48,407
44,273
2,808
\u2014
15
47,096
Satisfactory
14,598
2,706
\u2014
14
17,318
12,014
2,697
\u2014
6
14,717
Total strong/satisfactory
60,372
5,299
\u2014
54
65,725
56,287
5,505
\u2014
21
61,813
Criticised watch
728
1,828
\u2014
10
2,566
919
1,473
\u2014
5
2,397
Criticised recovery
18
847
\u2014
10
875
44
694
\u2014
40
778
Total criticised
746
2,675
\u2014
20
3,441
963
2,167
\u2014
45
3,175
Non-performing
1
\u2014
1,889
113
2,003
2
\u2014
1,923
56
1,981
Gross carrying amount
61,119
7,974
1,889
187
71,169
57,252
7,672
1,923
122
66,969
ECL allowance
(184)
(524)
(648)
12
(1,344)
(254)
(635)
(634)
3
(1,520)
Carrying amount
60,935
7,450
1,241
199
69,825
56,998
7,037
1,289
125
65,449
Gross loans1 and ECL movements (audited)
The following tables set out the movements in the gross carrying amount and ECL allowance for loans and advances to customers at amortised
cost by ECL staging between 1 January 2024 and 31 December 2024 and the corresponding movements between 1 January 2023 and
31\u00a0December 2023.
Accounts that triggered movements between Stage 1 and Stage 2 as a result of failing/curing a quantitative measure only (as disclosed on
page\u00a0191) and that subsequently reverted within the year to their original stage, are excluded from \u2018Transferred from Stage 1 to Stage 2\u2019
and\u00a0\u2018Transferred from Stage 2 to Stage 1\u2019. The Group believes this presentation aids the understanding of the underlying credit migration.
Gross carrying amount movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
57,252
7,672
1,923
122
66,969
Transferred from Stage 1 to Stage 2
(6,290)
6,290
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,509
(4,509)
\u2014
\u2014
\u2014
Transferred to Stage 3
(149)
(907)
1,056
\u2014
\u2014
Transferred from Stage 3
29
217
(246)
\u2014
\u2014
New loans originated/top-ups
15,898
\u2014
\u2014
88
15,986
Redemptions/repayments
(11,842)
(2,704)
(765)
(31)
(15,342)
Interest credited
2,863
469
89
5
3,426
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(264)
(112)
(81)
\u2014
(457)
Exchange translation adjustments
530
49
15
1
595
Impact of model, parameter and overlay changes
(1,499)
1,499
\u2014
\u2014
\u2014
Other movements
82
10
24
2
118
At 31 December
61,119
7,974
1,889
187
71,169
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
52,862
6,036
1,997
87
60,982
Transferred from Stage 1 to Stage 2
(7,377)
7,377
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,518
(4,518)
\u2014
\u2014
\u2014
Transferred to Stage 3
(125)
(1,070)
1,195
\u2014
\u2014
Transferred from Stage 3
47
262
(309)
\u2014
\u2014
New loans originated/top-ups
17,186
\u2014
\u2014
36
17,222
Redemptions/repayments
(11,266)
(1,895)
(579)
(10)
(13,750)
Interest credited
2,426
419
80
3
2,928
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(47)
(43)
(316)
\u2014
(406)
Exchange translation adjustments
74
21
6
\u2014
101
Impact of model, parameter and overlay changes
(1,082)
1,082
\u2014
\u2014
\u2014
Other movements
36
1
(26)
6
17
At 31 December
57,252
7,672
1,923
122
66,969
1. The gross carrying amount movement is recorded at each month end with movements calculated versus the position at previous month end. The sum of all 12 months
movement is then presented.
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued
ECL allowance movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
254
635
634
(3)
1,520
Transferred from Stage 1 to Stage 2
(79)
277
\u2014
\u2014
198
Transferred from Stage 2 to Stage 1
87
(243)
\u2014
\u2014
(156)
Transferred to Stage 3
\u2014
(108)
190
\u2014
82
Transferred from Stage 3
\u2014
21
(47)
\u2014
(26)
Net remeasurement (within Stage)
(8)
15
75
(10)
72
New loans originated/top-ups
57
\u2014
\u2014
\u2014
57
Redemptions/repayments
(33)
(69)
\u2014
\u2014
(102)
Impact of model and overlay changes
4
41
(37)
\u2014
8
Impact of credit or economic risk parameters
(16)
(17)
(8)
\u2014
(41)
Net remeasurement of ECL Allowance
12
(83)
173
(10)
92
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(88)
(29)
(56)
\u2014
(173)
Exchange translation adjustments
7
4
5
\u2014
16
Other movements
(1)
(3)
18
1
15
At 31 December
184
524
648
(12)
1,344
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
263
646
700
9
1,618
Transferred from Stage 1 to Stage 2
(100)
252
\u2014
\u2014
152
Transferred from Stage 2 to Stage 1
73
(209)
\u2014
\u2014
(136)
Transferred to Stage 3
(1)
(99)
180
\u2014
80
Transferred from Stage 3
2
28
(52)
\u2014
(22)
Net remeasurement (within Stage)
29
67
56
(12)
140
New loans originated/top-ups
49
\u2014
\u2014
\u2014
49
Redemptions/repayments
(25)
(99)
\u2014
\u2014
(124)
Impact of model and overlay changes
(16)
34
82
(4)
96
Impact of credit or economic risk parameters
(22)
19
(16)
\u2014
(19)
Net remeasurement of ECL Allowance
(11)
(7)
250
(16)
216
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(9)
(8)
(183)
\u2014
(200)
Exchange translation adjustments
\u2014
2
2
\u2014
4
Other movements
11
2
(10)
4
7
At 31 December
254
635
634
(3)
1,520
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued (audited)
Total exposures to which an ECL applies increased during the year by\u00a0
\u20ac 4.2 billion from \u20ac 67.0 billion at 1 January 2024 to \u20ac 71.2 billion at
31\u00a0December 2024. The increase in the year was driven by the strong
new lending in the year and the final tranche of the\u00a0Ulster Bank tracker
(and linked) mortgage portfolio acquisition (which is included within
\u2018New loans originated/top-ups\u2019).
Stage transfers are a key component of ECL allowance movements
(i.e. Stage 1 to Stage 2 to Stage 3 and vice versa) in addition to the net
remeasurement of ECL due to change in risk parameters within a
stage. Excluding the impact of model/overlay changes and the updated
macroeconomic scenarios, an ECL charge of \u20ac 125 million occurred
due to underlying credit management activity and a slight deterioration
in credit parameters which inform the modelled outcomes.
The impact of model and overlay changes resulted in an ECL charge of
\u20ac 8 million. This was driven by a \u20ac 67 million charge following the
deployment of the recalibrated grading models and a \u20ac 59 million
writeback relating to post model adjustments, largely driven by
utilisation as previously identified risks have now been captured in the
modelled outcomes. Further details on the post model adjustments are
outlined on pages 200 and 201. These ensure exposures subject to
risks which are not adequately reflected in the modelled outcomes,
retain an appropriate ECL.
The updated macroeconomic scenarios and weightings resulted in an
ECL release of \u20ac 41 million. This ECL movement is presented
separately within \u2018Impact of credit or economic risk parameters\u2019. This
release was most significant within the non-property business portfolio
accounting for a release of \u20ac 32 million within the portfolio. Despite the
update to the probability weightings tilting towards the downside
scenarios, the writeback reflects a more favourable base scenario
following the observed easing inflation and a reduction in interest and
unemployment rates. However, downside risks remain a concern, as
heightened geopolitical risks necessitate the Group\u2019s conservative
stance.
The gross loan transfers from Stage 1 to Stage 2 of \u20ac 6.3 billion are
due to underlying credit management activity where a significant
increase in credit risk occurred during the year through either the
quantitative or qualitative criteria for stage movement. 43% of the
movements relied on a qualitative or backstop indicator of significant
increase in credit risk (e.g. forbearance or movement to a watch grade)
with 4% caused solely by the backstop of 30 days past due. Of the
\u20ac\u00a06.3 billion which transferred from Stage 1 to Stage 2 in the year
approximately \u20ac 4.2 billion is reported as Stage 2 at 31 December 2024.
Where a movement to Stage 2 is triggered by multiple drivers
simultaneously these are reported in the following order: quantitative,
qualitative and backstop.
Similarly, transfers from Stage 2 to Stage 1 of \u20ac 4.5 billion represent
those loans where the triggers for significant increase in credit risk no
longer apply or loans that have fulfilled a probation period.
These transfers include loans which have been upgraded through
normal credit management processes and incorporates loans which
transferred due to the impact of the updated macroeconomic scenarios
and weightings.
Transfers from Stage 2 to Stage 3 of \u20ac 0.9 billion represent those loans
that defaulted during the year. These arose in cases where it was
determined that the customers were unlikely to pay their loans in full
without the realisation of collateral regardless of the existence of any
past due amount or the number of days past due. In addition, transfers
also include all borrowers that are 90 days or more past due on a
material obligation. Of the transfers from Stage 2 to Stage 3, \u20ac 0.3
billion had transferred from Stage 1 to Stage 2 earlier in the year.
Transfers from Stage 3 to Stage 2 of \u20ac 0.2 billion were mainly driven by
resolution activity with the customer, through either restructuring or
forbearance previously granted and which subsequently adhered to
default probation requirements. As part of the credit management
practices, active monitoring of loans and their adherence to default
probation requirements is in place.
In summary, the staging movements of the overall portfolio were as
follows:
Stage 1 loans have increased by \u20ac 3.8 billion to \u20ac 61.1 billion (2023:
\u20ac\u00a057.3 billion) due to strong new lending and the migration of the final
tranche of the Ulster Bank tracker (and linked) mortgage portfolio
acquisition.
Stage 2 loans have\u00a0increased by \u20ac 0.3 billion to \u20ac 8.0 billion (2023:
\u20ac\u00a07.7 billion). The increase in Stage 2 loans was driven by the
non\u2011property business and other personal portfolios which increased
by\u00a0\u20ac\u00a00.5 billion and \u20ac\u00a00.4\u00a0billion respectively. The increase in these
portfolios was impacted by the deployment in the year of the
recalibrated grading models which reflects an improvement in how the
Group measures the risk in these portfolios as opposed to any
deterioration in customer asset quality. These increases were slightly
offset by a \u20ac\u00a00.5\u00a0billion reduction in the residential mortgages portfolio.
Stage 3 loans remained unchanged in the year at \u20ac 1.9 billion with an
ECL of \u20ac 0.6 billion, resulting in cover of 34.3% (2023: 33.0%).
Further details on the stage movements by asset class are set out in
the following tables on pages 213 and 214.
Movements in off-balance sheet exposures (audited)
The following tables set out the movements in the nominal amount and ECL allowance for loan commitments and financial guarantees by ECL
staging for the year to 31 December 2024 and 2023 :
Nominal amount movements (audited)
2024
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
14,921
1,136
71
8
16,136
790
52
14
1
857
Transferred from Stage 1 to Stage 2
(835)
835
\u2014
\u2014
\u2014
(71)
71
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
401
(401)
\u2014
\u2014
\u2014
28
(28)
\u2014
\u2014
\u2014
Transferred to Stage 3
(16)
(20)
36
\u2014
\u2014
(2)
\u2014
2
\u2014
\u2014
Transferred from Stage 3
10
8
(18)
\u2014
\u2014
1
\u2014
(1)
\u2014
\u2014
Other movements1
873
(179)
(6)
(1)
687
137
(16)
(1)
(1)
119
At 31 December
15,354
1,379
83
7
16,823
883
79
14
\u2014
976
2023
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
13,947
1,033
80
\u2014
15,060
738
45
19
\u2014
802
Transferred from Stage 1 to Stage 2
(631)
631
\u2014
\u2014
\u2014
(40)
40
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
456
(456)
\u2014
\u2014
\u2014
51
(51)
\u2014
\u2014
\u2014
Transferred to Stage 3
(17)
(8)
25
\u2014
\u2014
(1)
(1)
2
\u2014
\u2014
Transferred from Stage 3
7
5
(12)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other movements1
1,159
(69)
(22)
8
1,076
42
19
(7)
1
55
At 31 December
14,921
1,136
71
8
16,136
790
52
14
1
857
1. Includes new commitments, utilised and expired commitments.
The internal credit grade profile of loan commitments and financial guarantees is set out in the following table (audited):
2024
2023
\u20ac m
\u20ac m
Strong
10,858
11,942
Satisfactory
6,435
4,711
Criticised watch
381
187
Criticised recovery
22
60
Default
103
93
Total
17,799
16,993
Non-performing off-balance sheet commitments
Total non-performing off-balance sheet commitments amounted to \u20ac 103 million (2023: \u20ac 93 million).
Movements in off-balance sheet exposures continued (audited)
ECL allowance movements (audited)
2024
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
12
26
4
1
43
2
5
9
\u2014
16
Transferred from Stage 1 to Stage 2
(3)
22
\u2014
\u2014
19
\u2014
5
\u2014
\u2014
5
Transferred from Stage 2 to Stage 1
6
(32)
\u2014
\u2014
(26)
2
(3)
\u2014
\u2014
(1)
Transferred to Stage 3
\u2014
\u2014
2
\u2014
2
\u2014
(1)
2
\u2014
1
Transferred from Stage 3
\u2014
\u2014
(1)
\u2014
(1)
\u2014
1
(1)
\u2014
\u2014
Net remeasurement
\u2014
7
(2)
\u2014
5
(2)
(3)
(2)
\u2014
(7)
Net income statement charge/(credit)
3
(3)
(1)
\u2014
(1)
\u2014
(1)
(1)
\u2014
(2)
Other movements
1
\u2014
1
\u2014
2
(1)
\u2014
\u2014
\u2014
(1)
At 31 December
16
23
4
1
44
1
4
8
\u2014
13
2023
Loan commitments
Financial guarantee contracts
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
19
35
5
\u2014
59
2
4
13
\u2014
19
Transferred from Stage 1 to Stage 2
(2)
23
\u2014
\u2014
21
(3)
4
\u2014
\u2014
1
Transferred from Stage 2 to Stage 1
3
(12)
\u2014
\u2014
(9)
3
(5)
\u2014
\u2014
(2)
Transferred to Stage 3
\u2014
(2)
3
\u2014
1
(1)
\u2014
1
\u2014
\u2014
Transferred from Stage 3
1
\u2014
(1)
\u2014
\u2014
1
\u2014
(1)
\u2014
\u2014
Net remeasurement
(9)
(17)
(2)
\u2014
(28)
\u2014
1
(2)
\u2014
(1)
Net income statement (credit)/charge
(7)
(8)
\u2014
\u2014
(15)
\u2014
\u2014
(2)
\u2014
(2)
Other movements
\u2014
(1)
(1)
1
(1)
\u2014
1
(2)
\u2014
(1)
At 31 December
12
26
4
1
43
2
5
9
\u2014
16
The following table analyses the residential mortgage portfolio at amortised cost by segment, internal credit ratings and ECL staging at
31 December 2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Owner occupier
34,346
417
\u2014
925
\u2014
35,688
32,068
405
\u2014
854
\u2014
33,327
Buy-to-let
1,174
62
\u2014
46
\u2014
1,282
1,315
71
\u2014
51
\u2014
1,437
Total
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
Analysed by internal credit ratings
Strong
28,930
311
\u2014
849
\u2014
30,090
25,812
324
\u2014
758
\u2014
26,894
Satisfactory
4,829
150
\u2014
72
\u2014
5,051
5,758
140
\u2014
68
\u2014
5,966
Total strong/satisfactory
33,759
461
\u2014
921
\u2014
35,141
31,570
464
\u2014
826
\u2014
32,860
Criticised watch
786
15
\u2014
11
\u2014
812
891
10
\u2014
33
\u2014
934
Criticised recovery
142
\u2014
\u2014
3
\u2014
145
247
\u2014
\u2014
4
\u2014
251
Total criticised
928
15
\u2014
14
\u2014
957
1,138
10
\u2014
37
\u2014
1,185
Non-performing
833
3
\u2014
36
\u2014
872
675
2
\u2014
42
\u2014
719
Gross carrying amount
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
Analysed by ECL staging
Stage 1
32,799
441
\u2014
925
\u2014
34,165
30,318
436
\u2014
840
\u2014
31,594
Stage 2
1,820
35
\u2014
10
\u2014
1,865
2,324
38
\u2014
23
\u2014
2,385
Stage 3
731
3
\u2014
36
\u2014
770
644
2
\u2014
42
\u2014
688
POCI
170
\u2014
\u2014
\u2014
\u2014
170
97
\u2014
\u2014
\u2014
\u2014
97
Total
35,520
479
\u2014
971
\u2014
36,970
33,383
476
\u2014
905
\u2014
34,764
ECL allowance \u2013 statement of financial position
Stage 1
10
\u2014
\u2014
\u2014
\u2014
10
19
\u2014
\u2014
\u2014
\u2014
19
Stage 2
52
1
\u2014
\u2014
\u2014
53
76
1
\u2014
\u2014
\u2014
77
Stage 3
206
1
\u2014
3
\u2014
210
202
\u2014
\u2014
5
\u2014
207
POCI
(3)
\u2014
\u2014
\u2014
\u2014
(3)
6
\u2014
\u2014
\u2014
\u2014
6
Total
265
2
\u2014
3
\u2014
270
303
1
\u2014
5
\u2014
309
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
0.1
\u2014
\u2014
\u2014
\u2014
0.1
Stage 2
2.9
2.5
\u2014
\u2014
\u2014
2.8
3.3
2.4
\u2014
\u2014
\u2014
3.2
Stage 3
28.2
30.3
\u2014
8.3
\u2014
27.2
31.4
\u2014
\u2014
9.7
\u2014
30.0
POCI
(1.8)
\u2014
\u2014
\u2014
\u2014
(1.8)
6.8
\u2014
\u2014
\u2014
\u2014
6.8
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
(27)
\u2014
\u2014
(1)
\u2014
(28)
36
1
\u2014
\u2014
\u2014
37
Recoveries of amounts
previously written-off
(8)
\u2014
\u2014
\u2014
\u2014
(8)
(7)
\u2014
\u2014
\u2014
\u2014
(7)
Net credit impairment
(writeback)/charge
(35)
\u2014
\u2014
(1)
\u2014
(36)
29
1
\u2014
\u2014
\u2014
30
Indexed loan-to-value ratios of the Group\u2019s residential mortgage portfolio
The following table profiles the residential mortgage portfolio by the indexed loan-to-value ratios at 31 December 2024 and 20231:
2024
2023
(Audited)
At amortised cost
At amortised cost
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Less than 80%
31,968
1,830
702
154
34,654
28,653
2,308
652
85
31,698
81 \u2013 100%
2,082
26
42
5
2,155
2,865
63
21
2
2,951
100 \u2013 120%
32
2
9
1
44
27
4
5
\u2014
36
Greater than 120%
80
6
15
3
104
47
8
6
\u2014
61
Total with LTVs
34,162
1,864
768
163
36,957
31,592
2,383
684
87
34,746
Unsecured
3
1
2
7
13
2
2
4
10
18
Total
34,165
1,865
770
170
36,970
31,594
2,385
688
97
34,764
Of which:
Owner occupier
Less than 80%
30,950
1,669
646
146
33,411
27,504
2,111
590
85
30,290
81 \u2013 100%
2,077
27
31
3
2,138
2,847
68
18
2
2,935
100 \u2013 120%
31
1
7
1
40
25
6
7
\u2014
38
Greater than 120%
76
5
10
3
94
44
7
5
\u2014
56
Total with LTVs
33,134
1,702
694
153
35,683
30,420
2,192
620
87
33,319
Unsecured
2
\u2014
1
2
5
1
\u2014
2
5
8
Total
33,136
1,702
695
155
35,688
30,421
2,192
622
92
33,327
1. At 31 December 2023, this table was reported for ROI mortgages only. At 31 December 2024, this table represents the total Group mortgage portfolio and the 2023
figures have been re-presented to reflect same.
The following table analyses other personal lending at amortised cost by segment, internal credit ratings and ECL staging at 31 December 2024
and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Credit cards
736
9
\u2014
22
\u2014
767
700
9
\u2014
23
\u2014
732
Loans/overdrafts
2,370
84
\u2014
44
\u2014
2,498
2,125
36
\u2014
47
\u2014
2,208
Total
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
Analysed by internal credit ratings
Strong
469
9
\u2014
59
\u2014
537
1,326
14
\u2014
61
\u2014
1,401
Satisfactory
1,797
76
\u2014
6
\u2014
1,879
1,153
29
\u2014
6
\u2014
1,188
Total strong/satisfactory
2,266
85
\u2014
65
\u2014
2,416
2,479
43
\u2014
67
\u2014
2,589
Criticised watch
728
8
\u2014
\u2014
\u2014
736
253
1
\u2014
2
\u2014
256
Criticised recovery
13
\u2014
\u2014
\u2014
\u2014
13
14
\u2014
\u2014
\u2014
\u2014
14
Total criticised
741
8
\u2014
\u2014
\u2014
749
267
1
\u2014
2
\u2014
270
Non-performing
99
\u2014
\u2014
1
\u2014
100
79
1
\u2014
1
\u2014
81
Gross carrying amount
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
Analysed by ECL staging
Stage 1
2,403
84
\u2014
62
\u2014
2,549
2,511
41
\u2014
61
\u2014
2,613
Stage 2
604
9
\u2014
3
\u2014
616
235
4
\u2014
8
\u2014
247
Stage 3
99
\u2014
\u2014
1
\u2014
100
79
\u2014
\u2014
1
\u2014
80
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
3,106
93
\u2014
66
\u2014
3,265
2,825
45
\u2014
70
\u2014
2,940
ECL allowance \u2013 statement of financial position
Stage 1
18
1
\u2014
\u2014
\u2014
19
20
\u2014
\u2014
1
\u2014
21
Stage 2
51
1
\u2014
\u2014
\u2014
52
31
1
\u2014
\u2014
\u2014
32
Stage 3
65
\u2014
\u2014
1
\u2014
66
44
\u2014
\u2014
\u2014
\u2014
44
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
134
2
\u2014
1
\u2014
137
95
1
\u2014
1
\u2014
97
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.8
0.6
\u2014
\u2014
\u2014
0.7
0.8
\u2014
\u2014
0.2
\u2014
0.8
Stage 2
8.5
9.3
\u2014
\u2014
\u2014
8.5
13.3
25.0
\u2014
\u2014
\u2014
12.9
Stage 3
65.4
\u2014
\u2014
63.0
\u2014
65.3
55.2
\u2014
\u2014
\u2014
\u2014
55.2
POCI
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
81
\u2014
\u2014
\u2014
\u2014
81
40
\u2014
\u2014
\u2014
\u2014
40
Recoveries of amounts
previously written-off
(2)
\u2014
\u2014
\u2014
\u2014
(2)
(4)
\u2014
\u2014
\u2014
\u2014
(4)
Net credit impairment charge
79
\u2014
\u2014
\u2014
\u2014
79
36
\u2014
\u2014
\u2014
\u2014
36
The following table analyses property and construction lending at amortised cost by segment, internal credit ratings and ECL staging at
31 December 2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Investment:
Residential investment
40
1,671
\u2014
409
\u2014
2,120
51
1,682
\u2014
244
\u2014
1,977
Student housing
\u2014
337
\u2014
541
\u2014
878
\u2014
258
\u2014
571
\u2014
829
Housing associations
\u2014
157
\u2014
486
\u2014
643
\u2014
145
\u2014
431
\u2014
576
Commercial investment \u2013 Office
23
1,433
\u2014
400
\u2014
1,856
29
1,569
\u2014
398
\u2014
1,996
Commercial investment \u2013 Retail
35
658
\u2014
90
\u2014
783
47
891
\u2014
58
\u2014
996
Commercial investment \u2013 Mixed
49
697
\u2014
116
\u2014
862
66
852
\u2014
132
\u2014
1,050
Commercial investment \u2013
Industrial
20
280
\u2014
160
\u2014
460
27
310
\u2014
155
\u2014
492
Total investment
167
5,233
\u2014
2,202
\u2014
7,602
220
5,707
\u2014
1,989
\u2014
7,916
Land and development:
Residential development
25
574
\u2014
101
\u2014
700
28
668
\u2014
154
\u2014
850
Commercial development
5
14
\u2014
90
\u2014
109
5
95
\u2014
42
\u2014
142
Total land and development
30
588
\u2014
191
\u2014
809
33
763
\u2014
196
\u2014
992
Contractors
231
91
\u2014
28
\u2014
350
203
83
\u2014
43
\u2014
329
Total
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
Analysed by internal credit ratings
Strong
54
4,473
\u2014
1,108
\u2014
5,635
141
4,904
\u2014
1,430
\u2014
6,475
Satisfactory
243
616
\u2014
1,227
\u2014
2,086
200
850
\u2014
681
\u2014
1,731
Total strong/satisfactory
297
5,089
\u2014
2,335
\u2014
7,721
341
5,754
\u2014
2,111
\u2014
8,206
Criticised watch
72
50
\u2014
3
\u2014
125
33
244
\u2014
19
\u2014
296
Criticised recovery
13
356
\u2014
7
\u2014
376
24
21
\u2014
30
\u2014
75
Total criticised
85
406
\u2014
10
\u2014
501
57
265
\u2014
49
\u2014
371
Non-performing
46
417
\u2014
76
\u2014
539
58
534
\u2014
68
\u2014
660
Gross carrying amount
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
Analysed by ECL staging
Stage 1
285
3,102
\u2014
2,110
\u2014
5,497
327
3,604
\u2014
1,892
\u2014
5,823
Stage 2
97
2,393
\u2014
235
\u2014
2,725
71
2,415
\u2014
268
\u2014
2,754
Stage 3
44
417
\u2014
76
\u2014
537
55
534
\u2014
68
\u2014
657
POCI
2
\u2014
\u2014
\u2014
\u2014
2
3
\u2014
\u2014
\u2014
\u2014
3
Total
428
5,912
\u2014
2,421
\u2014
8,761
456
6,553
\u2014
2,228
\u2014
9,237
ECL allowance \u2013 statement of financial position
Stage 1
1
44
\u2014
15
\u2014
60
2
40
\u2014
41
\u2014
83
Stage 2
5
208
\u2014
13
\u2014
226
5
241
\u2014
18
\u2014
264
Stage 3
15
149
\u2014
15
\u2014
179
19
159
\u2014
17
\u2014
195
POCI
(1)
\u2014
\u2014
\u2014
\u2014
(1)
(1)
\u2014
\u2014
\u2014
\u2014
(1)
Total
20
401
\u2014
43
\u2014
464
25
440
\u2014
76
\u2014
541
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.4
1.4
\u2014
0.7
\u2014
1.1
0.5
1.1
\u2014
2.2
\u2014
1.4
Stage 2
5.0
8.7
\u2014
5.6
\u2014
8.3
7.5
10.0
\u2014
6.7
\u2014
9.6
Stage 3
35.2
35.8
\u2014
19.6
\u2014
33.4
34.5
29.8
\u2014
24.2
\u2014
29.7
POCI
(51.4)
\u2014
\u2014
\u2014
\u2014
(51.4)
(43.7)
\u2014
\u2014
\u2014
\u2014
(43.7)
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
1
(6)
\u2014
14
\u2014
9
4
220
\u2014
43
\u2014
267
Recoveries of amounts
previously written-off
(3)
(3)
\u2014
\u2014
\u2014
(6)
(4)
(1)
\u2014
(1)
\u2014
(6)
Net credit impairment
(writeback)/charge
(2)
(9)
\u2014
14
\u2014
3
\u2014
219
\u2014
42
\u2014
261
Loans and advances to customers \u2013 Non-property business
The following table analyses non-property business lending at amortised cost by segment, internal credit ratings and ECL staging at 31 December
2024 and 2023:
(Audited)
2024
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Retail
Banking
Capital
Markets
Climate
Capital
AIB
UK
Group
Total
Gross carrying amount
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Natural resources
18
531
4,204
242
\u2014
4,995
20
334
3,000
256
\u2014
3,610
Of which renewables
\u2014
282
4,176
21
\u2014
4,479
\u2014
\u2014
2,899
8
\u2014
2,907
Leisure
298
2,016
\u2014
628
\u2014
2,942
340
1,876
\u2014
450
\u2014
2,666
Manufacturing
148
2,395
\u2014
210
\u2014
2,753
141
2,257
\u2014
121
\u2014
2,519
Health, education and social
work
109
1,327
\u2014
443
\u2014
1,879
112
1,344
\u2014
576
\u2014
2,032
Services
532
1,174
265
279
\u2014
2,250
504
1,074
198
288
\u2014
2,064
Agriculture, forestry and fishing
1,284
353
\u2014
54
\u2014
1,691
1,338
382
\u2014
60
\u2014
1,780
Retail and wholesale trade
381
1,408
\u2014
106
\u2014
1,895
398
1,257
\u2014
92
\u2014
1,747
Transport and storage
205
785
394
464
\u2014
1,848
192
697
365
456
\u2014
1,710
Telecomms, media and
technology
33
715
665
37
\u2014
1,450
35
740
555
64
\u2014
1,394
Financial, insurance and
other government\u00a0activities
25
314
\u2014
81
50
470
27
376
\u2014
75
28
506
Total
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
Of which Syndicated &
International Finance (SIF)
\u2014
2,803
\u2014
\u2014
\u2014
2,803
\u2014
2,618
\u2014
\u2014
\u2014
2,618
Analysed by internal credit ratings
Strong
141
5,674
4,858
1,452
20
12,145
809
6,216
3,751
1,541
9
12,326
Satisfactory
2,189
4,726
579
778
30
8,302
1,853
3,210
302
448
19
5,832
Total strong/satisfactory
2,330
10,400
5,437
2,230
50
20,447
2,662
9,426
4,053
1,989
28
18,158
Criticised watch
453
393
2
45
\u2014
893
153
599
37
122
\u2014
911
Criticised recovery
53
115
51
122
\u2014
341
75
198
28
137
\u2014
438
Total criticised
506
508
53
167
\u2014
1,234
228
797
65
259
\u2014
1,349
Non-performing
197
110
38
147
\u2014
492
217
114
\u2014
190
\u2014
521
Gross carrying amount
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
Analysed by ECL staging
Stage 1
2,241
9,349
5,206
2,062
50
18,908
2,490
8,856
4,023
1,825
28
17,222
Stage 2
591
1,558
284
335
\u2014
2,768
402
1,367
95
422
\u2014
2,286
Stage 3
188
109
38
147
\u2014
482
196
111
\u2014
191
\u2014
498
POCI
13
2
\u2014
\u2014
\u2014
15
19
3
\u2014
\u2014
\u2014
22
Total
3,033
11,018
5,528
2,544
50
22,173
3,107
10,337
4,118
2,438
28
20,028
ECL allowance \u2013 statement of financial position
Stage 1
10
46
19
20
\u2014
95
13
54
17
47
\u2014
131
Stage 2
30
125
20
18
\u2014
193
32
190
10
30
\u2014
262
Stage 3
65
42
6
80
\u2014
193
83
60
\u2014
45
\u2014
188
POCI
(7)
(1)
\u2014
\u2014
\u2014
(8)
(7)
(1)
\u2014
\u2014
\u2014
(8)
Total
98
212
45
118
\u2014
473
121
303
27
122
\u2014
573
ECL allowance cover
percentage
%
%
%
%
%
%
%
%
%
%
%
%
Stage 1
0.4
0.5
0.4
1.0
\u2014
0.5
0.5
0.6
0.4
2.6
\u2014
0.8
Stage 2
5.0
8.0
6.9
5.4
\u2014
6.9
8.0
13.9
10.5
7.1
\u2014
11.4
Stage 3
34.6
38.7
16.0
55.0
\u2014
40.2
42.4
54.1
\u2014
23.6
\u2014
37.8
POCI
(48.6)
(57.2)
\u2014
\u2014
\u2014
(49.7)
(36.9)
(33.3)
\u2014
\u2014
\u2014
(39.0)
Income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL
allowance
(5)
(63)
22
76
\u2014
30
2
(125)
(7)
2
\u2014
(128)
Recoveries of amounts
previously written-off
(7)
(7)
\u2014
(2)
\u2014
(16)
(7)
(1)
\u2014
(2)
\u2014
(10)
Net credit impairment
(writeback)/charge
(12)
(70)
22
74
\u2014
14
(5)
(126)
(7)
\u2014
\u2014
(138)
External credit ratings of certain financial asset s (audited)
The following table sets out the credit quality of certain financial assets based on available external credit ratings at 31 December 2024 and 2023.
These comprise loans and advances to banks of \u20ac 1,321 million (2023: \u20ac 1,329 million), securities financing of \u20ac 6,643 million (2023: \u20ac 6,466 million),
and investment debt securities at amortised cost of \u20ac 4,803 million (2023: \u20ac 4,510 million) and at FVOCI of \u20ac\u00a013,568 million (2023: \u20ac\u00a012,488
million) and trading portfolio financial assets of \u20ac 121 million (2023: \u20ac 84 million). Information on the credit ratings for loans and advances to
customers where an external credit rating is available is disclosed on page 227.
2024
2023
(Audited)
At amortised cost
At amortised cost
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
1,213
\u2014
2,412
1,946
5,571
1,725
\u2014
2,307
1,720
5,752
A/A-
5,391
1,240
17
167
6,815
4,829
1,126
16
192
6,163
BBB+/BBB/BBB-
15
245
34
\u2014
294
19
203
33
5
260
Sub investment
3
25
\u2014
\u2014
28
\u2014
73
\u2014
\u2014
73
Unrated
6
53
\u2014
\u2014
59
2
55
\u2014
\u2014
57
Total
6,628
1,563
2,463
2,113
1
12,767
6,575
1,457
2,356
1,917
1
12,305
Of which:
Stage 1
6,628
1,563
2,463
2,113
12,767
6,575
1,449
2,356
1,917
12,297
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8
\u2014
\u2014
8
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2024
2023
(Audited)
At FVOCI
At FVOCI
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
5,164
196
5,002
153
10,515
4,630
157
4,321
454
9,562
A/A-
1,205
373
490
\u2014
2,068
1,312
314
265
\u2014
1,891
BBB+/BBB/BBB-
163
169
643
\u2014
975
256
151
628
\u2014
1,035
Sub investment
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Unrated
\u2014
\u2014
10
\u2014
10
\u2014
\u2014
\u2014
\u2014
\u2014
Total
6,532
738
6,145
2
153
13,568
6,198
622
5,214
2
454
12,488
Of which:
Stage 1
6,532
738
6,145
153
13,568
6,198
622
5,214
454
12,488
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2024
2023
(Audited)
At FVTPL
At FVTPL
Bank
Corporate
Sovereign
Other
Total
Bank
Corporate
Sovereign
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
AAA/AA
\u2014
\u2014
103
\u2014
103
\u2014
\u2014
84
\u2014
84
A/A-
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
BBB+/BBB/BBB-
10
6
\u2014
\u2014
16
\u2014
\u2014
\u2014
\u2014
\u2014
Sub investment
2
\u2014
\u2014
\u2014
2
\u2014
\u2014
\u2014
\u2014
\u2014
Unrated
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
12
6
103
\u2014
121
\u2014
\u2014
84
\u2014
84
Of which:
Stage 1
12
6
103
\u2014
121
\u2014
\u2014
84
\u2014
84
Stage 2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Stage 3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1. Relates to asset backed securities.
2. Includes supranational banks and government agencies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-4": { "value": "
Gross loans1 and ECL movements (audited)
The following tables set out the movements in the gross carrying amount and ECL allowance for loans and advances to customers at amortised
cost by ECL staging between 1 January 2024 and 31 December 2024 and the corresponding movements between 1 January 2023 and
31\u00a0December 2023.
Accounts that triggered movements between Stage 1 and Stage 2 as a result of failing/curing a quantitative measure only (as disclosed on
page\u00a0191) and that subsequently reverted within the year to their original stage, are excluded from \u2018Transferred from Stage 1 to Stage 2\u2019
and\u00a0\u2018Transferred from Stage 2 to Stage 1\u2019. The Group believes this presentation aids the understanding of the underlying credit migration.
Gross carrying amount movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
57,252
7,672
1,923
122
66,969
Transferred from Stage 1 to Stage 2
(6,290)
6,290
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,509
(4,509)
\u2014
\u2014
\u2014
Transferred to Stage 3
(149)
(907)
1,056
\u2014
\u2014
Transferred from Stage 3
29
217
(246)
\u2014
\u2014
New loans originated/top-ups
15,898
\u2014
\u2014
88
15,986
Redemptions/repayments
(11,842)
(2,704)
(765)
(31)
(15,342)
Interest credited
2,863
469
89
5
3,426
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(264)
(112)
(81)
\u2014
(457)
Exchange translation adjustments
530
49
15
1
595
Impact of model, parameter and overlay changes
(1,499)
1,499
\u2014
\u2014
\u2014
Other movements
82
10
24
2
118
At 31 December
61,119
7,974
1,889
187
71,169
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
52,862
6,036
1,997
87
60,982
Transferred from Stage 1 to Stage 2
(7,377)
7,377
\u2014
\u2014
\u2014
Transferred from Stage 2 to Stage 1
4,518
(4,518)
\u2014
\u2014
\u2014
Transferred to Stage 3
(125)
(1,070)
1,195
\u2014
\u2014
Transferred from Stage 3
47
262
(309)
\u2014
\u2014
New loans originated/top-ups
17,186
\u2014
\u2014
36
17,222
Redemptions/repayments
(11,266)
(1,895)
(579)
(10)
(13,750)
Interest credited
2,426
419
80
3
2,928
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(47)
(43)
(316)
\u2014
(406)
Exchange translation adjustments
74
21
6
\u2014
101
Impact of model, parameter and overlay changes
(1,082)
1,082
\u2014
\u2014
\u2014
Other movements
36
1
(26)
6
17
At 31 December
57,252
7,672
1,923
122
66,969
1. The gross carrying amount movement is recorded at each month end with movements calculated versus the position at previous month end. The sum of all 12 months
movement is then presented.
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued
ECL allowance movements \u2013 total (audited)
2024
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
254
635
634
(3)
1,520
Transferred from Stage 1 to Stage 2
(79)
277
\u2014
\u2014
198
Transferred from Stage 2 to Stage 1
87
(243)
\u2014
\u2014
(156)
Transferred to Stage 3
\u2014
(108)
190
\u2014
82
Transferred from Stage 3
\u2014
21
(47)
\u2014
(26)
Net remeasurement (within Stage)
(8)
15
75
(10)
72
New loans originated/top-ups
57
\u2014
\u2014
\u2014
57
Redemptions/repayments
(33)
(69)
\u2014
\u2014
(102)
Impact of model and overlay changes
4
41
(37)
\u2014
8
Impact of credit or economic risk parameters
(16)
(17)
(8)
\u2014
(41)
Net remeasurement of ECL Allowance
12
(83)
173
(10)
92
Write-offs
\u2014
\u2014
(126)
\u2014
(126)
Derecognised due to disposals
(88)
(29)
(56)
\u2014
(173)
Exchange translation adjustments
7
4
5
\u2014
16
Other movements
(1)
(3)
18
1
15
At 31 December
184
524
648
(12)
1,344
2023
Stage 1
Stage 2
Stage 3
POCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
263
646
700
9
1,618
Transferred from Stage 1 to Stage 2
(100)
252
\u2014
\u2014
152
Transferred from Stage 2 to Stage 1
73
(209)
\u2014
\u2014
(136)
Transferred to Stage 3
(1)
(99)
180
\u2014
80
Transferred from Stage 3
2
28
(52)
\u2014
(22)
Net remeasurement (within Stage)
29
67
56
(12)
140
New loans originated/top-ups
49
\u2014
\u2014
\u2014
49
Redemptions/repayments
(25)
(99)
\u2014
\u2014
(124)
Impact of model and overlay changes
(16)
34
82
(4)
96
Impact of credit or economic risk parameters
(22)
19
(16)
\u2014
(19)
Net remeasurement of ECL Allowance
(11)
(7)
250
(16)
216
Write-offs
\u2014
\u2014
(125)
\u2014
(125)
Derecognised due to disposals
(9)
(8)
(183)
\u2014
(200)
Exchange translation adjustments
\u2014
2
2
\u2014
4
Other movements
11
2
(10)
4
7
At 31 December
254
635
634
(3)
1,520
2.1.2 Credit risk \u2013 Credit profile of the loan portfolio continued
Gross loans and ECL movements continued (audited)
Total exposures to which an ECL applies increased during the year by\u00a0
\u20ac 4.2 billion from \u20ac 67.0 billion at 1 January 2024 to \u20ac 71.2 billion at
31\u00a0December 2024. The increase in the year was driven by the strong
new lending in the year and the final tranche of the\u00a0Ulster Bank tracker
(and linked) mortgage portfolio acquisition (which is included within
\u2018New loans originated/top-ups\u2019).
Stage transfers are a key component of ECL allowance movements
(i.e. Stage 1 to Stage 2 to Stage 3 and vice versa) in addition to the net
remeasurement of ECL due to change in risk parameters within a
stage. Excluding the impact of model/overlay changes and the updated
macroeconomic scenarios, an ECL charge of \u20ac 125 million occurred
due to underlying credit management activity and a slight deterioration
in credit parameters which inform the modelled outcomes.
The impact of model and overlay changes resulted in an ECL charge of
\u20ac 8 million. This was driven by a \u20ac 67 million charge following the
deployment of the recalibrated grading models and a \u20ac 59 million
writeback relating to post model adjustments, largely driven by
utilisation as previously identified risks have now been captured in the
modelled outcomes. Further details on the post model adjustments are
outlined on pages 200 and 201. These ensure exposures subject to
risks which are not adequately reflected in the modelled outcomes,
retain an appropriate ECL.
The updated macroeconomic scenarios and weightings resulted in an
ECL release of \u20ac 41 million. This ECL movement is presented
separately within \u2018Impact of credit or economic risk parameters\u2019. This
release was most significant within the non-property business portfolio
accounting for a release of \u20ac 32 million within the portfolio. Despite the
update to the probability weightings tilting towards the downside
scenarios, the writeback reflects a more favourable base scenario
following the observed easing inflation and a reduction in interest and
unemployment rates. However, downside risks remain a concern, as
heightened geopolitical risks necessitate the Group\u2019s conservative
stance.
The gross loan transfers from Stage 1 to Stage 2 of \u20ac 6.3 billion are
due to underlying credit management activity where a significant
increase in credit risk occurred during the year through either the
quantitative or qualitative criteria for stage movement. 43% of the
movements relied on a qualitative or backstop indicator of significant
increase in credit risk (e.g. forbearance or movement to a watch grade)
with 4% caused solely by the backstop of 30 days past due. Of the
\u20ac\u00a06.3 billion which transferred from Stage 1 to Stage 2 in the year
approximately \u20ac 4.2 billion is reported as Stage 2 at 31 December 2024.
Where a movement to Stage 2 is triggered by multiple drivers
simultaneously these are reported in the following order: quantitative,
qualitative and backstop.
Similarly, transfers from Stage 2 to Stage 1 of \u20ac 4.5 billion represent
those loans where the triggers for significant increase in credit risk no
longer apply or loans that have fulfilled a probation period.
These transfers include loans which have been upgraded through
normal credit management processes and incorporates loans which
transferred due to the impact of the updated macroeconomic scenarios
and weightings.
Transfers from Stage 2 to Stage 3 of \u20ac 0.9 billion represent those loans
that defaulted during the year. These arose in cases where it was
determined that the customers were unlikely to pay their loans in full
without the realisation of collateral regardless of the existence of any
past due amount or the number of days past due. In addition, transfers
also include all borrowers that are 90 days or more past due on a
material obligation. Of the transfers from Stage 2 to Stage 3, \u20ac 0.3
billion had transferred from Stage 1 to Stage 2 earlier in the year.
Transfers from Stage 3 to Stage 2 of \u20ac 0.2 billion were mainly driven by
resolution activity with the customer, through either restructuring or
forbearance previously granted and which subsequently adhered to
default probation requirements. As part of the credit management
practices, active monitoring of loans and their adherence to default
probation requirements is in place.
In summary, the staging movements of the overall portfolio were as
follows:
Stage 1 loans have increased by \u20ac 3.8 billion to \u20ac 61.1 billion (2023:
\u20ac\u00a057.3 billion) due to strong new lending and the migration of the final
tranche of the Ulster Bank tracker (and linked) mortgage portfolio
acquisition.
Stage 2 loans have\u00a0increased by \u20ac 0.3 billion to \u20ac 8.0 billion (2023:
\u20ac\u00a07.7 billion). The increase in Stage 2 loans was driven by the
non\u2011property business and other personal portfolios which increased
by\u00a0\u20ac\u00a00.5 billion and \u20ac\u00a00.4\u00a0billion respectively. The increase in these
portfolios was impacted by the deployment in the year of the
recalibrated grading models which reflects an improvement in how the
Group measures the risk in these portfolios as opposed to any
deterioration in customer asset quality. These increases were slightly
offset by a \u20ac\u00a00.5\u00a0billion reduction in the residential mortgages portfolio.
Stage 3 loans remained unchanged in the year at \u20ac 1.9 billion with an
ECL of \u20ac 0.6 billion, resulting in cover of 34.3% (2023: 33.0%).
Further details on the stage movements by asset class are set out in
the following tables on pages 213 and 214.
11\u00a0 Net credit impairment charge
The following table analyses the income statement net credit impairment charge on financial instruments for the years to 31 December 2024
and\u00a0 2023.
2024
2023
Credit impairment charge
on financial instruments
Measured
at amortised
cost
Measured
at FVOCI
Total
Measured
at amortised
cost
Measured
at FVOCI
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net remeasurement of ECL allowance
Loans and advances to banks
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Loans and advances to customers
(92)
\u2014
(92)
(216)
\u2014
(216)
Securities financing
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Loan commitments
1
\u2014
1
15
\u2014
15
Financial guarantee contracts
2
\u2014
2
2
\u2014
2
Investment securities \u2013 debt
2
\u2014
2
\u2014
\u2014
\u2014
Credit impairment charge
(87)
\u2014
(87)
(199)
\u2014
(199)
Recoveries of amounts previously written-off
32
\u2014
32
27
\u2014
27
Total net credit impairment charge
(55)
\u2014
(55)
(172)
\u2014
(172)
20\u00a0 ECL allowance on financial assets
The following table shows the movements on the ECL allowance on financial assets. Further information is disclosed in the Gross Loans and ECL
movement tables in the \u2018Risk management\u2019 section of this report. See pages 210 to 216.
2024
2023
\u20ac m
\u20ac m
At 1 January
1,525
1,623
Net re-measurement of ECL allowance \u2013 investment securities-debt
(2)
\u2014
Net re-measurement of ECL allowance \u2013 banks
\u2014
\u2014
Net re-measurement of ECL allowance \u2013 customers
92
216
Net re-measurement of ECL allowance \u2013 securities financing
\u2014
\u2014
Changes in ECL allowance due to write-offs
(126)
(125)
Changes in ECL allowance due to disposals
(173)
(200)
Exchange translation adjustments
16
4
Other
15
7
At 31 December
1,347
1,525
Amount included in financial assets measured at amortised cost:
Investment securities \u2013 debt
1
3
Loans and advances to banks
\u2014
\u2014
Loans and advances to customers
1,344
1,520
Securities financing
1
1
Other assets \u2013 stockbroking client debtors
1
1
At 31 December
1,347
1,525
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-5": { "value": "
Management and measurement (audited)
The Market Risk Management framework and policies set out the key
requirements for managing market risk. The key aspects of this are:
\u2022 The Group\u2019s Treasury function is responsible for managing market
risk. Treasury also has a mandate to trade on its own account in
selected wholesale markets with risk tolerances approved on an
annual basis through the Group\u2019s Risk Appetite process;
\u2022 The Group documents its annual Market Risk Strategy to ensure
market risk aligns with the Group\u2019s strategic business plan; and
\u2022 Market risk is managed against a range of Board approved internal
capital limits which cover market risk in the trading book, interest rate
risk and credit spread risk in the banking book. The Board approved
limits are supplemented by a range of ALCo approved limits which
include nominal, sensitivity limits and \u2018stop loss\u2019 limits.
Market risk is managed and measured using portfolio sensitivities,
internal capital limits Value at Risk (\u2018VaR\u2019) and stress testing. Interest
rate gaps and sensitivities to various risk factors are measured and
reported on a daily basis. In terms of the VaR metric, the Group
calculates a daily historical simulation VaR to a 95% confidence level,
using a one day holding period and based on one year of historic data.
In addition to VaR, Capital at Risk (\u2018CaR\u2019) is also measured to a one
year1 time horizon, a 99% confidence level and a longer set of data.
Credit risk issues inherent in the market risk portfolios are also subject
to the credit risk framework that is described in Section 2.1.
The Group maintains a Structural Hedging Programme (SHP), subject
to oversight by ALCo. The SHP provides a framework for assessing
and re-balancing the extent of earnings sensitivity (to market rate
changes) versus the economic value (or capital) attributed to IRRBB.
Forecast structural changes in the composition of the balance sheet are
a key driver of the annual SHP strategy. From an IRRBB capital
perspective the SHP strategy seeks to maintain a broadly duration-
matched repricing term profile where term asset positions (typically,
interest rate derivatives and fixed rate mortgages) are offset by stable,
non and low interest-bearing liabilities, principally comprising current
accounts and deposits, and equity.
The SHP strategy provides an effective basis for stabilising income
over the medium term and\u00a0 protecting income during periods of falling
interest rates. SHP interest rate derivatives are subject to either cash
flow hedging of floating-rate assets or macro fair value hedging of
customer accounts.
1. The Capital at Risk on core trading book positions is assessed using a ten day
horizon, with the exception of FX which is assessed using a one year horizon.
Monitoring, escalating and reporting (audited)
On a daily basis front office and risk functions receive a range of
valuation, sensitivity and market risk measurement reports, while ALCo
receives a monthly market risk commentary and summary risk profile.
Market risk exposures are reported to the Group Risk Committee
(\u2018GRC\u2019) and Board Risk Committee (\u2018BRC\u2019) on a monthly basis through
the CRO Report.
2.2 Market and Equity risks continued
(a) Market risk continued (audited)
The following table sets out financial assets and financial liabilities at 31 December 2024 and 2023 subject to market risk analysed between
trading and non-trading portfolios, showing the principal market risks to which the assets and liabilities are exposed:
2024
(Audited)
Market risk measures
Carrying
amount
Trading
portfolios
Non-trading
portfolios
\u20ac m
\u20ac m
\u20ac m
Risk factors
Assets subject to market risk
Cash and balances at central banks
37,315
\u2014
37,315
Interest rate, foreign exchange
Trading portfolio financial assets
136
136
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
2,144
425
1,719
Interest rate, foreign exchange, credit
spreads, equity, inflation rates, wholesale
electricity prices
Loans and advances to banks
1,321
\u2014
1,321
Interest rate, foreign exchange
Loans and advances to customers
69,889
\u2014
69,889
Interest rate, foreign exchange
Securities financing
6,643
\u2014
6,643
Interest rate, credit spreads, foreign
exchange
Investment securities
18,668
\u2014
18,668
Interest rate, foreign exchange, credit
spreads, equity
Liabilities subject to market risk
Deposits by central banks and banks
836
\u2014
836
Interest rate, foreign exchange
Customer accounts
109,883
\u2014
109,883
Interest rate, foreign exchange
Securities financing
196
\u2014
196
Interest rate, credit spreads, foreign
exchange
Trading portfolio financial liabilities
262
262
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
1,807
461
1,346
Interest rate, foreign exchange, credit
spreads, equity, inflation rates, wholesale
electricity prices
Debt securities in issue
8,832
\u2014
8,832
Interest rate, credit spreads, foreign
exchange
Subordinated liabilities and other capital instruments
1,627
\u2014
1,627
Interest rate, credit spreads
2023
(Audited)
Market risk measures
Carrying
amount
Trading
portfolios
Non-trading
portfolios
\u20ac m
\u20ac m
\u20ac m
Risk factors
Assets subject to market risk
Cash and balances at central banks
38,018
\u2014
38,018
Interest rate, foreign exchange
Trading portfolio financial assets
93
93
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
2,377
457
1,920
Interest rate, foreign exchange, credit
spreads, equity, inflation rates
Loans and advances to banks
1,329
\u2014
1,329
Interest rate, foreign exchange
Loans and advances to customers
65,491
\u2014
65,491
Interest rate, foreign exchange
Securities financing
6,466
\u2014
6,466
Interest rate, credit spreads, foreign
exchange
Investment securities
17,353
\u2014
17,353
Interest rate, foreign exchange, credit
spreads, equity
Liabilities subject to market risk
Deposits by central banks and banks
1,780
\u2014
1,780
Interest rate, foreign exchange
Customer accounts
104,782
\u2014
104,782
Interest rate, foreign exchange
Securities financing
575
\u2014
575
Interest rate, credit spreads, foreign
exchange
Trading portfolio financial liabilities
139
139
\u2014
Interest rate, foreign exchange, equity
Derivative financial instruments
1,902
448
1,454
Interest rate, foreign exchange, credit
spreads, equity, inflation rates
Debt securities in issue
8,423
\u2014
8,423
Interest rate, credit spreads, foreign
exchange
Subordinated liabilities and other capital instruments
1,473
\u2014
1,473
Interest rate, credit spreads
Interest rate sensitivity (audited)
The table below shows the sensitivity of the Group\u2019s banking book to an immediate and sustained +/- 100 basis point, +/-50 basis point and
+/-25\u00a0basis point movement in interest rates, in terms of the impact on net interest income on a forward looking basis over a twelve month period,
assuming no change in the balance sheet.
Sensitivity of projected net interest income to interest rate movements:
December 2024 (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
- 100bps
- 50bps
- 25bps
+ 25bps
+ 50bps
+ 100bps
Euro
(385)
(189)
(93)
80
163
329
Sterling
(37)
(19)
(9)
9
19
37
Other (mainly US $)
(17)
(8)
(4)
4
8
17
Total
(439)
(216)
(106)
93
190
383
December 2023 (audited)
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
- 100bps
- 50bps
- 25bps
+ 25bps
+ 50bps
+ 100bps
Euro
(332)
(145)
(53)
49
130
292
Sterling
(37)
(19)
(9)
9
18
37
Other (mainly US $)
(12)
(6)
(3)
3
6
11
Total
(381)
(170)
(65)
61
154
340
The above sensitivity table is computed under the assumption of an
unchanged balance sheet and that all market rates (Risk Free Rates/
Euribors/Swaps) move upwards or downwards in parallel. Managing
interest rate sensitivity has been a key risk management priority during
2024, given the evolving interest rate environment and the more
restrictive EBA NII Supervisory Outlier Test threshold. The year-on-year
increase in the reported sensitivity has been driven by the ongoing
dynamics in the customer deposit market which includes the growth in
balances, the slow pace of deposit balance migration from interest
insensitive to interest-bearing products and the impact of retail pass-
through models. On the asset side, increases in the bond portfolio and
a change in the mix of mortgage products towards variable rates have
also contributed. Given the composition of the balance sheet, and its
expected evolution, the trade\u2011off between managing IRRBB earnings
(NII Sensitivity) and economic value (Capital at Risk) perspectives will
continue to be a priority. In particular, the evolution of customer deposit
balance migration is closely monitored, given the \u2018static balance sheet\u2019
assumption underpinning this NII Sensitivity metric.
Group interest rate and foreign exchange rate VaR are calculated to a
95% confidence level with a one day holding period, and equity VaR is
calculated to a 99% confidence level with a one day holding period. At
31 December 2024, interest rate VaR stood at \u20ac 18.72 million, foreign
exchange rate VaR at \u20ac 0.32 million and equity VaR at \u20ac 0.2 million.
The Group recognises the limitations of VaR models, and supplements
its VaR measures with stress tests which draw from a longer set of
historical data and also with sensitivity measures.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-6": { "value": "
2.3 Capital adequacy risk (audited)
Capital adequacy risk is the risk that the Group breaches or may
breach regulatory capital ratios and internal targets, measured on
a\u00a0forward looking basis across a range of scenarios, including a\u00a0severe
but plausible stress.
Identification and assessment (audited)
An annual MRA is conducted to identify all relevant (current and
anticipated) material risks which are then assessed from a capital
perspective. The sub-risks are identified as part of the MRA process
including risks surrounding the quality and composition of capital as
well as measurement and forecasting risk. Capital adequacy risk is
primarily evaluated through the annual financial planning and the
Group\u2019s ICAAP processes where the level of capital required to support
growth plans and meet regulatory requirements is assessed over the
three year planning horizon. Plans are assessed across a range of
scenarios ranging from base case and moderate downside scenarios
to\u00a0a severe but plausible stress using the Group\u2019s stress testing
methodologies.
Monitoring, escalating and reporting (audited)
The Group monitors its capital adequacy on a monthly basis through
a\u00a0capital reporting pack which is presented to senior executives and
Board setting out the evolution of the Group\u2019s capital position. The risk
profile, including performance against risk appetite, is presented to the
BRC via the CRO report which is produced independently by the
second line of defence. The escalation process, as stipulated under the
RAS policy, is commenced in the event of a breach of either the RAS
watch trigger or limit for any of the metrics. This ensures Board and
Regulator notification, where appropriate, within approved timeframes.
The output of internal stress tests is reviewed by ALCo and, on an
annual basis, an ICAAP report is produced which is a comprehensive
analysis of the Group\u2019s capital position in base and stress scenarios over
a three year horizon. The ICAAP document is reviewed and approved
by the Board and is submitted to the Joint Supervisory Team, where it
forms the basis of their supervisory review and evaluation\u00a0process.
The objectives of the Group\u2019s capital management policy are to at all times comply with regulatory capital requirements and to ensure that the
Group has sufficient capital to cover the current and future risk inherent in its business and to support its future development.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-7": { "value": "
Management and measurement (audited)
The objective of liquidity management is to ensure that, at all times,
the\u00a0Group holds sufficient funds to meet its contracted and contingent
commitments to customers and counterparties at an economic price.
The ILAAP Framework and supporting Funding and Liquidity risk policy
set out the key requirements for managing the risk. These include:
\u2022 adherence to both internal limits and regulatory defined liquidity
ratios including the Liquidity Coverage Ratio (\u2018LCR\u2019) and the Net
Stable Funding Ratio (\u2018NSFR\u2019). The LCR is designed to promote
short term resilience of the Group\u2019s liquidity risk profile by ensuring
that it has sufficient high quality liquid resources to survive an acute
stress scenario lasting for 30 days. The NSFR has a time horizon of
one year and has been developed to promote a sustainable maturity
structure of assets and liabilities;
\u2022 performing a multi-year projection of the Group\u2019s funding sources,
taking into account its baseline scenario, strategy and operational
plans as outlined in the Group\u2019s Funding and Liquidity Plan. The
purpose of this Plan is to set out a comprehensive, forward looking
liquidity and funding strategy for the Group, including material
subsidiary companies;
\u2022 assessing the Funding and Liquidity Plan under a range of adverse
scenarios, the outcomes of which should ensure sufficient liquidity to
implement a sustainable strategy, even in a stressed environment;
\u2022 maintaining a Contingency Funding Plan that identifies and quantifies
actions that are available to the Group in deteriorating liquidity
conditions and to help it emerge from a temporary liquidity crisis as a
credit-worthy institution;
\u2022 monitoring a further set of triggers and liquidity options outlined in the
Group\u2019s Recovery Plan, which presents the actions available to the
Group to restore viability in the event of extreme stress; and
\u2022 having an approved liquidity cost-benefit allocation mechanism in
place to attribute funding costs, benefits and risks to the Group\u2019s
business lines.
Funding structure (audited)
The Group\u2019s funding strategy is to deliver a sustainable, diversified and
robust customer deposit base at economic pricing and to further enhance
and strengthen the wholesale funding franchise, with appropriate
access to term markets to support core lending activities. The strategy
aims to deliver a solid funding structure that complies with internal and
regulatory policy requirements and reduces the probability of a liquidity
stress, i.e. an inability to meet funding obligations as they fall due.
Customer deposits represent the largest source of funding for the
Group, with the core retail franchises and accompanying deposit base
in both Ireland and the UK providing a stable and reasonably
predictable source of funds.
2024
2023
Customer accounts (audited)
\u20ac m
\u20ac m
Total
109,883
104,782
Of which:
Euro
98,270
93,732
Sterling
9,754
9,237
US Dollar
1,624
1,608
Other currencies
235
205
Customer accounts increased by \u20ac 5,101 million in 2024, driven by
higher personal and SME balances. This was predominantly reflected
in higher Euro time deposit accounts, coupled with an increase across
all other Group significant currencies (GBP and USD). There was a\u00a0 \u00a0 \u00a0
\u20ac 533 million increase in the value of GBP and USD deposits, mainly
due to currency movements.
1. QLA are assets that can be readily converted into cash, either with the market or with the monetary authorities, and where there is no\u00a0legal, operational or prudential
impediments to their use as liquid\u00a0assets.
2.4 Liquidity and funding risk continued
Composition of wholesale funding1 (audited)
The Group maintains access to a variety of sources of wholesale funding, including bank deposits, securities financing, debt securities and
subordinated debt. At 31 December 2024, total wholesale funding outstanding was \u20ac 11,491 million (2023: \u20ac 12,251 million), of which \u20ac 2,366
million is due to mature in less than one year (2023: \u20ac 2,805 million).
(Audited)
2024
< 1
month
\u20ac m
1\u20133
months
\u20ac m
3\u20136
months\u00a0
\u20ac m
6\u201312
months\u00a0
\u20ac m
Total
< 1 year
\u20ac m
1\u20133
years
\u20ac m
3\u20135
years
\u20ac m
> 5
years
\u20ac m
Total
\u20ac m
Deposits by central banks and banks
830
\u2014
6
\u2014
836
\u2014
\u2014
\u2014
836
Securities financing
184
12
\u2014
\u2014
196
\u2014
\u2014
\u2014
196
Senior debt
\u2014
\u2014
\u2014
495
495
2,183
3,461
1,734
7,873
ACS
2
\u2014
\u2014
\u2014
2
\u2014
5
20
27
Credit linked notes
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
95
95
Commercial paper
539
230
68
\u2014
837
\u2014
\u2014
\u2014
837
Subordinated liabilities and
other\u00a0capital\u00a0instruments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1,627
1,627
Total 31 December
1,555
242
74
495
2,366
2,183
3,466
3,476
11,491
Of which:
Secured
186
12
6
\u2014
204
\u2014
5
115
324
Unsecured
1,369
230
68
495
2,162
2,183
3,461
3,361
11,167
1,555
242
74
495
2,366
2,183
3,466
3,476
11,491
(Audited)
2023
< 1 month
\u20ac m
1\u20133
months
\u20ac m
3\u20136
months
\u20ac m
6\u201312
months
\u20ac m
Total
< 1 year
\u20ac m
1\u20133
years
\u20ac m
3\u20135
years
\u20ac m
> 5
years
\u20ac m
Total
\u20ac m
Deposits by central banks and banks
1,040
452
\u2014
\u2014
1,492
98
190
\u2014
1,780
Securities financing
358
217
\u2014
\u2014
575
\u2014
\u2014
\u2014
575
Senior debt
\u2014
\u2014
738
\u2014
738
2,786
1,643
3,229
8,396
ACS
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
5
22
27
Credit linked notes
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Commercial paper
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Subordinated liabilities and
other\u00a0capital\u00a0instruments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1,473
1,473
Total 31 December
1,398
669
738
\u2014
2,805
2,884
1,838
4,724
12,251
Of which:
Secured
358
217
\u2014
\u2014
575
98
195
22
890
Unsecured
1,040
452
738
\u2014
2,230
2,786
1,643
4,702
11,361
1,398
669
738
\u2014
2,805
2,884
1,838
4,724
12,251
1. The maturity analysis has been prepared using the residual contractual maturity of the liabilities.
Deposits by central banks and banks decreased by \u20ac 944 million
to\u00a0\u20ac\u00a0836 million, primarily driven by lower deposits by central banks
and\u00a0cash collateral received from derivative counterparties. For further
details, see note 28 to the Consolidated Financial Statements.
Securities Financing decreased \u20ac\u00a0379 million to \u20ac 196 million, reflective
of a decrease in standard bilateral bank repo activity (see the currency
split in the 'Currency composition of wholesale funding' table).
During 2024, senior debt decreased \u20ac 523 million to \u20ac 7,873 million,
primarily reflecting a $ 1 billion early redemption and a \u20ac 750 million
contractual maturity, offset by a $ 1 billion MREL bond issuance. Over
the twelve months to 31 December 2023, there was a net commercial
paper issuance of \u20ac 837 million, whilst outstanding asset-covered
securities (\u2018ACS\u2019) remained flat at \u20ac 27 million. For further details,
see\u00a0note 30 to the Consolidated Financial Statements. Subordinated
liabilities increased \u20ac 154 million to \u20ac 1,627 million, driven by a green
Tier 2 capital issuance of \u20ac\u00a0650 million, partially offset by \u20ac 500 million
redemption.
Financial assets and financial liabilities by contractual residual maturity (audited)
The following table analyses financial assets and financial liabilities by contractual residual maturity at 31 December 2024 and 2023:
(Audited)
2024
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets1
Cash and balances at central banks
37,315
\u2014
\u2014
\u2014
\u2014
37,315
Derivative financial instruments2
16
52
700
1,376
2,144
Loans and advances to banks3
642
679
\u2014
\u2014
\u2014
1,321
Loans and advances to customers3
2,319
1,331
2,950
20,778
43,855
71,233
Securities financing
5
1,610
2,970
2,058
\u2014
6,643
Investment securities4
\u2014
276
603
8,002
9,490
18,371
Other financial assets
\u2014
894
\u2014
\u2014
\u2014
894
40,281
4,806
6,575
31,538
54,721
137,921
Financial liabilities5,6
Deposits by central banks and banks
26
804
6
\u2014
\u2014
836
Customer accounts
93,977
7,790
4,856
3,230
30
109,883
Securities financing
\u2014
196
\u2014
\u2014
\u2014
196
Derivative financial instruments2
72
78
538
1,119
1,807
Debt securities in issue
\u2014
769
562
5,649
1,852
8,832
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
\u2014
1,627
1,627
Other financial liabilities
1,748
\u2014
\u2014
44
\u2014
1,792
95,751
9,631
5,502
9,461
4,628
124,973
2.4 Liquidity and funding risk continued
Financial assets and financial liabilities by contractual residual maturity continued (audited)
(Audited)
2023
On demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets1
Cash and balances at central banks
38,018
\u2014
\u2014
\u2014
\u2014
38,018
Derivative financial instruments2
\u2014
14
56
717
1,590
2,377
Loans and advances to banks3
588
741
\u2014
\u2014
\u2014
1,329
Loans and advances to customers3
2,145
1,770
3,003
18,545
41,548
67,011
Securities financing
10
849
3,329
2,278
\u2014
6,466
Investment securities4
23
586
470
6,484
9,435
16,998
Other financial assets
\u2014
688
\u2014
\u2014
\u2014
688
40,784
4,648
6,858
28,024
52,573
132,887
Financial liabilities5,6
Deposits by central banks and banks
22
1,470
\u2014
288
\u2014
1,780
Customer accounts
95,095
5,297
2,943
1,418
29
104,782
Securities financing
\u2014
575
\u2014
\u2014
\u2014
575
Derivative financial instruments3
\u2014
41
110
444
1,307
1,902
Debt securities in issue
\u2014
\u2014
738
4,434
3,251
8,423
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
\u2014
1,473
1,473
Other financial liabilities
1,571
\u2014
\u2014
\u2014
\u2014
1,571
96,688
7,383
3,791
6,584
6,060
120,506
1. Excludes trading portfolio financial assets of \u20ac 136 million (2023: \u20ac 93 million). The contractual maturity of those assets in 2024 is: \u20ac 26 million in <3 months but not on
demand; \u20ac 13 million in 1-5 years; and \u20ac 97 million over 5 years (2023: \u20ac 9 million in <3 months but not on demand;\u00a0 \u20ac 10 million in 3 months to 1 year; \u20ac 2 million in 1-5
years and \u20ac 72 million over 5 years).
2. Shown by maturity date of contract.
3. Shown gross of expected credit losses.
4. Excluding equity shares.
5. A maturity of lease liabilities is disclosed in note 31.
6. Excludes trading portfolio financial liabilities of \u20ac 262 million (2023: \u20ac 139 million). The contractual maturity of those liabilities in 2024 is: \u20ac 5 million in <3 months but not on
demand; \u20ac 190 million in 1-5 years and \u20ac 67 million over 5 years (2023: \u20ac 7 million in <3 months but not on demand; \u20ac 89 million in 1-5 years and \u20ac 43 million over 5 years).
Financial liabilities by undiscounted contractual maturity (audited)
The balances in the table below include the undiscounted cash flows relating to principal and interest on financial liabilities and as such will not
agree directly with the balances on the Consolidated Statement of Financial Position. All derivative financial instruments have been analysed
based on their contractual maturity undiscounted cash flows.
The following table analyses, on an undiscounted basis, financial liabilities by remaining contractual maturity at 31 December 2024 and\u00a02023:
In the daily management of liquidity risk, the Group adjusts the contractual outflows on customer deposits to reflect the inherent stability of these
deposits. Offsetting the liability outflows are cash inflows from the assets on the Consolidated Statement of Financial Position. Additionally, the
Group holds a stock of high-quality liquid assets, which\u00a0are held for the purpose of covering unexpected cash outflows.
(Audited)
2024
On
demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial liabilities1,2
Deposits by central banks and banks
26
804
6
\u2014
\u2014
836
Customer accounts
93,978
7,836
5,006
3,275
31
110,126
Securities financing
\u2014
196
\u2014
\u2014
\u2014
196
Derivative financial instruments
\u2014
137
263
472
116
988
Debt securities in issue
\u2014
813
880
6,761
2,232
10,686
Subordinated liabilities and other capital instruments
\u2014
\u2014
59
320
1,859
2,238
Other financial liabilities
1,664
\u2014
\u2014
64
\u2014
1,728
95,668
9,786
6,214
10,892
4,238
126,798
2.4 Liquidity and funding risk continued
Financial liabilities by undiscounted contractual maturity continued (audited)
(Audited)
2023
On
demand
<3 months
but not on
demand
3 months
to 1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial liabilities1,2
Deposits by central banks and banks
22
1,473
\u2014
312
\u2014
1,807
Customer accounts
95,095
5,320
3,016
1,452
29
104,912
Securities financing
\u2014
577
\u2014
\u2014
\u2014
577
Derivative financial instruments
\u2014
275
400
925
411
2,011
Debt securities in issue
\u2014
44
1,018
5,506
3,471
10,039
Subordinated liabilities and other capital instruments
\u2014
\u2014
38
262
1,724
2,024
Other financial liabilities
1,571
\u2014
\u2014
\u2014
\u2014
1,571
96,688
7,689
4,472
8,457
5,635
122,941
1. Excludes trading portfolio financial liabilities of \u20ac 262 million (2023: \u20ac 139 million). The undiscounted contractual maturity for those liabilities in 2024 is: \u20ac 5 million in
<3\u00a0months but not on demand; \u20ac 190 million in 1-5 years and \u20ac 67 million over 5 years.
2. A maturity of lease liabilities is disclosed in note 32.
The undiscounted cash flows potentially payable under guarantees and similar contracts (audited)
The undiscounted cash flows that are potentially payable under guarantees and\u00a0similar contracts, included below within contingent liabilities, are
classified on the basis of the earliest date the facilities can be called. The Group is only called upon to satisfy a guarantee when the guaranteed
party fails to meet their obligations. The Group expects that most guarantees it provides will expire unused. The Group has given commitments to
provide funds to customers under undrawn facilities. The undiscounted cash flows have been classified on the basis of the earliest date that the
facility can be drawn. The Group does not expect all facilities to be drawn, and some may lapse before drawdown. For further details, see note 39
to the Consolidated Financial Statements.\u00a0The following table analyses undiscounted cash flows potentially payable under guarantees and similar
contracts at 31 December 2024 and 2023:
(Audited)
2024
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Contingent liabilities
976
\u2014
\u2014
\u2014
\u2014
976
Commitments
16,823
\u2014
\u2014
\u2014
\u2014
16,823
17,799
\u2014
\u2014
\u2014
\u2014
17,799
(Audited)
2023
On demand
<3 months
but not on
demand
3 months to
1 year
1\u20135 years
Over 5
years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Contingent liabilities
857
\u2014
\u2014
\u2014
\u2014
857
Commitments
16,136
\u2014
\u2014
\u2014
\u2014
16,136
16,993
\u2014
\u2014
\u2014
\u2014
16,993
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"f-520": { "value": "-3249000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-521": { "value": "1326000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-522": { "value": "-928000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-523": { "value": "-362000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:635400AKJBGNS5WNQL34", 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"unit": "iso4217:EUR" } }, "f-532": { "value": "466000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-533": { "value": "137000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-534": { "value": "
1\u00a0 Accounting policies
The material accounting policies that the Group applied in the
preparation of the financial statements are set out in this section. The
Group, as a pillar bank with diverse stakeholder groups, has considered
both quantitative and qualitative factors (including the complexity of its
financial statements and the range of users of its financial statements)
in its assessment of which accounting policies to disclose as material.
(a) Reporting entity
AIB Group plc (\u2018the parent company\u2019 or \u2018the Company\u2019) is a company
domiciled in Ireland. The address of the Company\u2019s registered office is
10 Molesworth Street, Dublin 2, Ireland. AIB Group plc is registered
under the Companies Act 2014 as a public limited company under the
company number 594283 and is the holding company of the Group.
The consolidated financial statements for the year ended 31 December
2024 include the financial statements of AIB Group plc and its subsidiary
undertakings, collectively referred to as \u2018AIB Group\u2019 or \u2018the Group\u2019,
where appropriate, including certain structured entities and the Group\u2019s
interest in associates/joint ventures using the equity method of
accounting and are prepared to the end of the financial period. The
Group is and has been primarily involved in retail and corporate banking.
(b) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Accounting Standards and International
Financial Reporting Standards (collectively 'IFRSs') as adopted by the
European Union ('EU') and applicable for the financial year ended
31\u00a0December 2024. The consolidated financial statements also comply
with those parts of the Companies Act 2014 and the European Union
(Credit Institutions: Financial Statements) Regulations 2015 applicable
to companies reporting under IFRS, and the Asset Covered Securities
Acts 2001 and 2007 and Article 4 of the IAS Regulation. The
accounting policies have been consistently applied by Group entities
and are consistent with the previous year, unless otherwise described.
(c) Basis of preparation
Functional and presentation currency
The financial statements are presented in Euro, which is the functional
currency of the parent company and a significant number of its
subsidiaries, rounded to the nearest million.
Basis of measurement and presentation
The financial statements have been prepared under the historical cost
basis, with the exception of the following assets and liabilities which are
stated at their fair value: derivative financial instruments, financial
instruments at fair value through profit or loss, certain hedged financial
assets and financial liabilities and investment securities at fair value
through other comprehensive income ('FVOCI'). The carrying values of
recognised assets and liabilities that are hedged items in fair value
hedges, other than portfolio hedges, and otherwise carried at amortised
cost, are adjusted to record changes in fair value attributable to the
risks that are being hedged.
The financial statements comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated
statement of financial position, the consolidated statement of cash
flows, and the consolidated statement of changes in equity together
with the related notes. The financial statements include the information
that is described as being an integral part of the audited financial
statements contained in: (i) Sections 2.1, 2.2, 2.3 and 2.4 of the
Risk\u00a0Management Report as described further on page 179 and
(ii)\u00a0the\u00a0Directors' remuneration section of the Corporate Governance
Remuneration Statement as described further on pages 163 and 165.
Change in presentation for certain items in the primary statements
The Group has changed the presentation of reserves in the
consolidated statement of changes in equity to better align with the
presentation in the consolidated statement of financial position. The
related comparatives for 2023 have been re-presented.
Change in presentation for certain notes to the financial statements
(i) Segmental information
The Group has changed the presentation in note 3 following the
introduction of the new Climate Capital segment. The related
comparatives for 2023 have been re-presented. For further information,
please refer to page 283.
The Group has also changed the description of certain line items in the
'Net fee and commission income' table in note 3 to more appropriately
reflect the nature of the fee and commission income and expenses.
\u2018Foreign exchange fees\u2019 was changed to \u2018customer related foreign
exchange\u2019, \u2018credit related fees\u2019 was changed to \u2018lending related fees\u2019,
\u2018specialised payment services fees\u2019 was changed to \u2018specialised
payment services fees (Payzone)\u2019 and \u2018specialised payment services
expenses\u2019 was changed to \u2018specialised payment services expenses
(Payzone)\u2019.
(ii) Derivative financial instruments
In 2024 the Group revised the maturity analysis disclosure to better align
it with the current maturity profile of the Group\u2019s hedging instruments.
The related comparatives for 2023 have been re-presented.
(iii) Provisions for liabilities and commitments
The Group has presented legal claims, customer redress and other
provisions as separate classes of provisions in 2024. Belfry related
provisions, the FSPO provision and other individually immaterial
customer redress provisions (which were previously presented within
other provisions) are now all presented as customer redress provisions.\u00a0
The related comparatives for 2023 have been re-presented. The\u00a0Group
has also changed the description of the related line item in the
operating expenses note from 'restitution and associated costs' to
'customer redress'.
(iv) Credit risk
The Group has changed the presentation of certain credit risk tables.\u00a0
The related comparatives for 2023 have been re-presented. For further
information please refer to \u2018Post model adjustments\u2019 on page 200 and
\u2018Indexed loan-to-value ratios of the Group\u2019s residential mortgage
portfolio\u2019 on page 221.
Adoption of new accounting policies
The Group commenced portfolio fair value hedging to hedge on-demand
deposits and current accounts with low/zero fixed interest rates and
entered into a credit risk transfer transaction in 2024. The policies are
described in \u2018(o) derivatives and hedge accounting\u2019 and \u2018(s) financial
guarantees and loan commitment contracts\u2019 respectively.
Use of judgements and estimates
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
policies and reported amounts of certain assets, liabilities, revenues
and expenses, and disclosures of contingent assets and liabilities. The
estimates and assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. Since management\u2019s judgement may involve making
estimates concerning the likelihood of future events, the actual results
could differ from those estimates. The estimates and assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any
future period affected. The judgements that have a significant effect on
the consolidated financial statements and estimates with a significant
risk of material adjustment in the next year relate to:
\u2022 Impairment of financial assets;
\u2022 Deferred taxation;
\u2022 Retirement benefit obligations; and
\u2022 Provisions for liabilities and commitments.
A\u00a0description of these judgements and estimates is set\u00a0out in note 2.
1\u00a0 Accounting policies continued
(c) Basis of preparation continued
Consideration of climate change
In preparing the financial statements, the Directors have considered the
impact of climate change, particularly in the context of the risks identified
in the \u2018Sustainability Statement\u2019 in this Annual Financial Report. There
has been no material impact identified on the financial reporting
judgements and estimates of the Group. In particular, the Directors
considered the impact of climate change in respect of the following areas:
\u2022 Credit risk: The impact of climate risk on the management,
escalating and reporting of credit risk was considered by the Group.
There is currently no reasonable and supportable information that
indicates a material impact of climate change on estimated credit
losses ('ECL') at a macro level and the Group\u2019s approach to
individual counterparty risk assessment adequately captures climate
risk where appropriate.
\u2022 Going concern and viability: The assessment of the group\u2019s going
concern and viability over the next three years did not identify
material climate-related risks, both in terms of our decarbonisation
commitments and the physical risks from climate change. This is set
out in further detail on page 171.\u00a0
\u2022 Provisions and contingent liabilities: The Group\u2019s publicly
announced commitment to reduce absolute Scope 1 greenhouse gas
(\u2018GHG\u2019) emissions 34% by 2027 from a 2019 base year and to
increase annual sourcing of renewable electricity from 1% in 2019 to
100% by 2030 are not considered a constructive obligation or a
contingent liability. The timeframe allows opportunities for the Group
to evolve its plans for how the decarbonisation strategy will be met
and therefore the Group should not currently recognise a provision or
a contingent liability in relation to its commitment (i.e. as the Group
does not have an obligation as a result of a past event). IAS 37
Provisions, Contingent Liabilities and Contingent Assets sets out that
it is only those obligations arising from past events existing
independently of an entity's future actions that are recognised as
provisions or disclosed as contingent liabilities.
\u2022 Impairment of non-financial assets: The Group applies the
requirements of IAS 36 Impairment of Assets in assessing whether
impacted assets are impaired at a reporting date. The Group has a
robust process to identify assets that may be impaired which requires the
identification of all material potential impairment triggers including
identification of climate related impairment triggers. The Group\u2019s
impairment charge for 2024 includes the impact of the Greener Branches
Refurbishments Programme to improve branch and office buildings\u2019
energy efficiency. In\u202faddition, the Group\u2019s published decarbonisation
commitments do not impact the useful lives of the Group\u2019s impacted
assets as the Group proposes to replace impacted assets as their useful
lives expire. In 2024, the Group continued our phased approach to
transitioning our fleet, which is on track for full electrification by 2027.
Going concern
The financial statements for the year ended 31 December 2024 have
been prepared on a going concern basis as the Directors are satisfied,
having considered the risks and uncertainties impacting the Group, that it
has the ability to continue in business for the period of assessment. In
making this assessment, the Directors have considered a wide range of
information relating to present and future conditions. This includes capital
forecasts and internally generated stress scenarios to take account of
geopolitical risks, the impacts of inflation, increased interest rates and
related impacts on unemployment and property prices. The period of
assessment used by the Directors is at least 12\u00a0months from the date of
approval of these annual financial statements.
(d) Basis of consolidation \u2013 Notes 13, 22 and 40
The consolidated financial statements comprise the financial statements
of\u00a0the Group and its subsidiaries including controlled structured entities.
Subsidiary undertakings
Subsidiary undertakings are all entities (including structured entities)
over\u00a0which the group has control. The Group controls an entity where
the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiary
undertakings are fully consolidated from the date on which control is
transferred to the Group. They are derecognised from the date that
control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated, unless the transaction provides evidence of
an impairment of the transferred asset. Accounting policies of
subsidiaries have been updated where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are
shown separately in the consolidated income statement, statement of
comprehensive income, statement of changes in equity and
consolidated statement of financial position respectively.
If the Group loses control over a subsidiary undertaking, it
derecognises the related assets (including goodwill), liabilities,
non\u2011controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss.
Investments accounted for using the equity method
The Group\u2019s investments accounted for using the equity method
comprise its investments in associates and joint ventures.
An associated undertaking is an entity over which the Group has
significant influence, but not control, over the entity\u2019s operating and
financial policy decisions. If the Group holds 20% or more of the voting
power of an entity, it is presumed that the Group has significant
influence, unless it can be clearly demonstrated that this is not
the\u00a0case.
A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of
the\u00a0arrangement.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group\u2019s
share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group\u2019s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
Where the Group\u2019s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group\u2019s interest in
these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Since the goodwill that forms part of the carrying amount of the
investment in an associate is not recognised separately, it is, therefore,
not tested for impairment separately. Instead, the entire amount of the
investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate
may be impaired.
1\u00a0 Accounting policies continued
(e) Foreign currency translation
Items included in the financial statements of each of the Group\u2019s entities
are measured using their functional currency, being the currency of the
primary economic environment in which the entity operates.
Transactions and balances
Foreign currency transactions are translated into the respective entity\u2019s
functional currency using the exchange rates prevailing at the dates of
the transactions. Monetary assets and liabilities denominated in foreign
currencies are re-translated at the rate prevailing at the period-end.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the re-translation at period end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement.
Exchange differences on equities and similar non-monetary items held
at fair value through profit or loss are reported as part of the fair value
gain or loss. Exchange differences on a financial instruments
designated as a hedge of the net investment in a foreign operation are
reported in other comprehensive income.
Foreign operations
The results and financial position of all Group entities that have
a\u00a0functional currency different from the Euro are translated into Euro
as\u00a0follows:
\u2022 Assets and liabilities including goodwill and fair value adjustments
arising on consolidation of foreign operations are translated at the
closing rate;
\u2022 Income and expenses are translated into Euro at the average rates
of\u00a0exchange during the period where these rates approximate to
the\u00a0foreign exchange rates ruling at the dates of the transactions;
\u2022 Foreign currency translation differences are recognised in other
comprehensive income; and
\u2022 Since 1 January 2004, the Group\u2019s date of transition to IFRS, all
such exchange differences are included in the foreign currency
cumulative translation reserve within shareholders\u2019 equity. When a
foreign operation is disposed of in full, the relevant amount of this
reserve is transferred to the income statement. When a subsidiary is
partly disposed, the relevant proportion of foreign currency
translation reserve is re-attributed to the non-controlling interest. In
the case of a partial disposal, a pro-rata amount of the foreign
currency cumulative translation reserve is transferred to the income
statement. A partial disposal is also considered to have occurred
when a formal decision has been made to wind down an entity and
where capital is being repaid but there has not been a reduction in
the Group\u2019s overall percentage holding.
(f) Interest income and expense recognition \u2013 Notes 4 and 5
Interest income and expense is recognised in the income statement
using the effective interest rate method.
Effective interest rate
The effective interest rate is the rate that exactly discounts the estimated
future cash payments or receipts through the expected life of the
financial instrument to:
\u2022 The gross carrying amount of the financial asset; or
\u2022 The amortised cost of the financial liability.
The application of the method has the effect of recognising income
receivable and expense payable on the instrument evenly in proportion
to the amount outstanding over the period to maturity or repayment.
In\u00a0calculating the effective interest rate for financial instruments, the
Group estimates cash flows (using projections based on its experience
of customers\u2019 behaviour) considering all contractual terms of the
financial instrument but excluding expected credit losses (except,
in\u00a0the\u00a0case of POCI financial assets where expected credit losses are
included in the calculation of a credit-adjusted effective interest rate).
The calculation takes into account all fees, including those for any
expected early redemption, and points paid or received between parties
to the contract that are an integral part of the effective interest rate, as
well as transaction costs and all other premiums and discounts.
All costs associated with mortgage incentive schemes are included in
the effective interest rate calculation. Fees and commissions payable to
third parties in connection with lending arrangements, where these are
direct and incremental costs related to the issue of a financial instrument,
are included in interest income as part of the effective interest rate.
Amortised cost and gross carrying amount
The amortised cost of a financial asset or financial liability is the
amount at which the financial asset or financial liability is measured at
initial recognition minus the principal repayments, plus or minus the
cumulative amortisation using the effective interest rate method of any
difference between the initial amount and the maturity amount and, for
financial assets, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost
before adjusting for any loss allowance.
Calculation of interest income and interest expense
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit impaired) or to the amortised cost of the liability.
For financial assets that have become credit impaired subsequent to
initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is
no longer credit impaired, the calculation of interest income reverts to
the gross basis.
However, for financial assets that were credit impaired on initial
recognition, interest income is calculated by applying the credit
adjusted effective interest rate to the amortised cost of the financial
asset. The calculation of interest income does not revert to a gross
basis, even if the credit risk of the asset improves.
When a financial asset is no longer credit impaired or has been repaid
in full (i.e. cured without financial loss), the Group presents previously
unrecognised interest income as a reversal of credit impairment/
recovery of amounts previously written-off.
Interest income and expense on financial assets and liabilities
classified as\u00a0held for trading or at fair value through profit or loss
(\u2018FVTPL\u2019) is recognised in \u2018other interest income and similar income\u2019 or
\u2018interest expense\u2019 in the income statement, as applicable.
1\u00a0 Accounting policies continued
(f) Interest income and expense recognition continued
Presentation
Interest income and expense presented in the consolidated income
statement include:
\u2022 Interest on financial assets and financial liabilities measured at
amortised cost calculated on an effective interest rate basis;
\u2022 Interest on investment debt securities measured at FVOCI calculated
on an effective interest rate basis;
\u2022 Net interest income and expense on qualifying hedge derivatives
designated as cash flow hedges or fair value hedges which are
recognised in interest income or interest expense;
\u2022 Net interest income or expense on derivatives that are held with
hedging intent, but for which hedge accounting is not applied;
\u2022 Interest income and funding costs of trading portfolio financial assets;
\u2022 Interest income and expense on leases and hire purchase contracts;
and
\u2022 Interest income on financial assets at FVTPL.
(g) Fee and commission income \u2013 Note 3
The measurement and timing of recognition of fee and commission
income is based on the core principles of IFRS 15 Revenue from
Contracts with Customers.
Fee and commission income is recognised when the performance
obligation in the contract has been performed, either at a \u2018point in time\u2019
or \u2018over time\u2019 if the performance obligation is performed over a period of
time unless the income has been included in the effective interest
rate\u00a0calculation.
The Group includes in the transaction price, some or all of an amount
of variable consideration estimated only to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
The majority of the Group\u2019s fee and commission income arises from
retail banking activities. Loan syndication fees are recognised as
revenue when the syndication has been completed and the Group has
retained no part of the loan package for itself or retained a part at the
same effective interest rate as applicable to the other participants.
Customer related foreign exchange is fee income that is derived from
arranging foreign exchange transactions on behalf of customers.
Such\u00a0income is recognised when the individual performance obligation
has been fulfilled.
Portfolio and other management advisory and service fees are
recognised based on the applicable service contracts. Asset
management fees relating to investment funds are recognised over
time in line with the performance obligation. The same principle is
applied to the recognition of income from wealth management, financial
planning and custody services that are continuously provided over an
extended period of time.
Commitment fees together with related direct costs, for loan facilities
where drawdown is probable, are deferred and recognised as an
adjustment to the effective interest rate on the loan once drawn.
Commitment fees in relation to facilities where drawdown is not
probable are recognised over the term of the commitment on a straight
line basis. Other lending related fees are recognised over time in line
with the performance obligation except for arrangement fees where it is
likely that the facility will be drawn down, and which are included in the
effective interest rate calculation.
Fee income and fee expenses in respect of services and prepaid
credits for cellular phone and utilities sold to third parties are classified
as specialised payment services fees (Payzone) and are recognised
when the performance obligation is satisfied.
(h) Employee benefits \u2013 Note 27
Retirement benefit obligations
The Group provides employees with post-retirement benefits mainly in
the form of pensions.
The Group operates a number of retirement benefit schemes including
defined benefit and defined contribution schemes. This includes
benefits for some members accrued from 2007 to 2013 under a hybrid
scheme arrangement that had both defined benefit and defined
contribution elements. In addition, the Group contributes, according to
local law in the various countries in which it operates, to governmental
and other schemes which have the characteristics of defined
contribution schemes.
Full actuarial valuations of defined benefit schemes are undertaken
every three years and are updated to reflect current conditions at each
year end reporting date.
Scheme assets are measured at fair value determined by using current
bid prices, except for insurance policies acquired as part of a buy in. If
the policies are qualifying policies under IAS 19 Employee Benefits and
if the timing and amount of payments under the policies exactly match
some or all of the benefits payable under the scheme, then the present
value of the related obligation is determined and is deemed to be the
fair value of the insurance policies to be included in plan assets.
Scheme liabilities are measured on an actuarial basis by estimating the
amount of future benefit that employees have earned for their service in
current and prior periods and discounting that benefit at the market
yield on a high-quality corporate bond of equivalent term and currency
to the liability. The calculation is performed by a qualified actuary using
the projected unit credit method. The difference between the fair value
of the scheme assets and the present value of the defined benefit
obligation at the year end reporting date is recognised in the statement
of financial position. Schemes in surplus are shown as assets and
schemes in deficit, together with unfunded schemes, are shown as
liabilities. A surplus is only recognised as an asset to the extent that it is
recoverable through a refund from the scheme or through reduced
contributions in the future. Actuarial gains and losses are recognised
immediately in other comprehensive income.
The cost of providing defined benefit pension schemes to employees,
comprising the net interest on the net defined benefit liability/(asset),
calculated by applying the discount rate to the net defined benefit
liability/(asset) at the start of the annual reporting period, taking into
account contributions and benefit payments during the period, is
charged to the income statement within personnel expenses.
Remeasurements of the net defined benefit liability/(asset), comprising
actuarial gains and losses and the return on scheme assets (excluding
amounts included in net interest on the net defined benefit liability/
(asset)) are recognised in other comprehensive income. Amounts
recognised in other comprehensive income in relation to
remeasurements of the net defined benefit liability/(asset) will not be
reclassified to profit or loss in a subsequent period.
1\u00a0 Accounting policies continued
(h) Employee benefits continued
The Group recognises the effect of an amendment to a defined benefit
scheme when the plan amendment occurs, which is when the Group
introduces or withdraws a defined benefit scheme, or changes the
benefits payable under existing defined benefit schemes. A\u00a0curtailment
is recognised when a significant reduction in the number of employees
covered by a defined benefit scheme occurs. A settlement is a
transaction that eliminates all further legal or constructive obligations
for part or all of the benefits provided under a defined benefit scheme.
Gains or losses on plan amendments, curtailments and settlements are
recognised in the income statement.
Changes with regard to benefits payable to retirees which represent a
constructive obligation under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets are accounted for as a past service cost. These
are recognised in the income statement.
The costs of managing the defined benefit scheme assets are deducted
from the return on scheme assets. All costs of running the defined
benefit schemes are recognised in the income statement when they
are\u00a0incurred.
The cost of the Group\u2019s defined contribution schemes is charged to the
income statement in the accounting period in which it is incurred. Any
contributions unpaid at the year end reporting date are included as a
liability. The Group has no further obligation under these schemes once
these contributions have been paid.
Short term employee benefits
Short term employee benefits, such as salaries and other benefits,
are\u00a0accounted for on an accruals basis over the period during which
employees have provided services. Bonuses are recognised to the
extent that the Group has a legal or constructive obligation to its
employees that can be measured reliably.
(i) Income tax, including deferred income tax \u2013 Notes 14 and 26
Income tax comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates
to items recognised in other comprehensive income, in which case it
is\u00a0recognised in other comprehensive income. Income tax relating to
items in equity is recognised directly in equity. However, the income tax
consequences of payments on financial instruments that are classified
as equity but treated as liabilities for tax purposes are recognised in
profit or loss if those payments are distributions of profits previously
recognised in profit or loss.
Current tax is the expected tax payable on the taxable income for the
year using tax rates enacted or substantively enacted at the reporting
date and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the balance sheet liability
method, on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is determined using tax rates based on legislation
enacted or substantively enacted at the reporting date and is expected
to apply when the deferred tax asset is realised or the deferred tax
liability is settled. Deferred income tax assets are recognised when it is
probable that future taxable profits will be available against which the
temporary differences will be utilised. The deferred tax asset is
reviewed at the end of each reporting period and the carrying amount
will reflect the extent that it is probable that sufficient taxable profits will
be available to allow all of the asset to be recovered.
The tax effects of income tax losses available for carry forward are
recognised as an asset to the extent that it is probable that future taxable
profits will be available against which these losses can be utilised.
Deferred and current tax assets and liabilities are only offset when they
arise in the same tax reporting group and where there is both the legal
right and the intention to settle the current tax assets and liabilities on a
net basis or to realise the asset and settle the liability simultaneously.
The principal temporary differences arise from the depreciation of
property, plant and equipment, revaluation of certain financial assets
and financial liabilities including derivative contracts, provisions for
pensions and other post-retirement benefits, and in relation to
acquisitions, on the difference between the fair values of the net assets
acquired and their tax base.
Deferred income tax is provided on temporary differences arising from
investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference is controlled by the Group and
it is probable that the difference will not reverse in the foreseeable
future. In addition, temporary differences are not provided for assets
and liabilities the initial recognition of which, in a transaction that is not
a business combination, affects neither accounting nor taxable profit.
Income tax payable on profits arising from investments in subsidiaries
and associates, based on the applicable tax law in each jurisdiction, is
recognised as an expense in the period in which the profits arise.
The Group adopted the amendments to IAS 12 by the IASB
(International Tax Reform \u2013 Pillar Two Model Rules) in 2023. The
amendments provide a mandatory temporary exception from the
requirement to recognise and disclose deferred taxes arising from
enacted or substantively enacted tax law that implements the Pillar
Two\u00a0model rules. Accordingly, the Group has not recognised any
changes to its deferred tax assets or liabilities in respect of Pillar Two.
(j) Financial assets \u2013 Notes 7, 8, 15, 17, 18, 19, 21, 25 and 42
Recognition and initial measurement
The Group initially recognises financial assets on the trade date, being
the date on which the Group commits to purchase the assets. Loan
assets are recognised when cash is advanced to borrowers. In a
situation where the Group commits to purchase financial assets under
a contract which is not considered a regular-way transaction, the assets
to be acquired are not recognised until the acquisition contract is
settled. In this case, the contract to acquire the financial asset is a
derivative that is measured at FVTPL in the period between the trade
date and the settlement date.
Financial assets measured at amortised cost or at fair value through
other comprehensive income (\u2018FVOCI\u2019) are recognised initially at fair
value adjusted for direct and incremental transaction costs. Financial
assets measured at fair value through profit or loss (\u2018FVTPL\u2019) are
recognised initially at fair value and transaction costs are taken directly
to the income statement.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into. The best evidence of the fair value of
a derivative at initial recognition is the transaction price (i.e. the fair value
of the consideration given or received) unless the fair value of that
instrument is evidenced by comparison with other observable current
market transactions in the same instrument (i.e. without modification or
repackaging) or based on a valuation technique whose variables include
only data from observable markets. Profits or losses are only recognised
on the initial recognition of derivatives when there are observable current
market transactions or valuation techniques that are based on
observable market inputs.
1\u00a0 Accounting policies continued
(j) Financial assets continued
Classification and subsequent measurement
On initial recognition, a financial asset is classified and subsequently
measured at amortised cost, FVOCI or FVTPL.
The classification and subsequent measurement of financial assets
depend on:
\u2022 The Group\u2019s business model for managing the asset; and
\u2022 The cash flow characteristics of the asset (for assets in a
\u2018hold\u2011to\u2011collect\u2019 or \u2018hold-to-collect-and-sell\u2019 business model).
Based on these factors, the Group classifies its financial assets into
one of the following categories:
\u2013 Amortised cost
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect\u2019 business model whose objective is to hold assets to
collect contractual cash flows; and whose contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest (\u2018SPPI\u2019). The carrying amount of these assets is calculated
using the effective interest rate method and is adjusted on each
measurement date by the expected credit loss allowance for each
asset, with movements recognised in profit or loss.
\u2013 Fair value through other comprehensive income (\u2018FVOCI\u2019)
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect-and-sell\u2019 business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets;
and whose contractual terms give rise on specified dates to cash flows
that are SPPI. Movements in the carrying amount of these assets are
taken through other comprehensive income (\u2018OCI\u2019), except for the
recognition of credit impairment gains or losses, interest revenue or
foreign exchange gains and losses, which are recognised in profit or
loss. When a financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to profit or
loss other than in the case of equity instruments designated at\u00a0FVOCI.
\u2013 Fair value through profit or loss (\u2018FVTPL\u2019)
Financial assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVTPL. Gains or losses (excluding interest
income or expense) on such assets are recognised in profit or loss on
an ongoing basis.
In addition, the Group may irrevocably designate a financial asset as at
FVTPL that otherwise meets the requirements to be measured at
amortised cost or at FVOCI if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Business model assessment
The Group makes an assessment of the objective of the business
model at a portfolio level, as this reflects how portfolios of assets are
managed to achieve a particular objective, rather than management\u2019s
intentions for individual assets.
The assessment considers the following:
\u2022 The strategy for the portfolio as communicated by management;
\u2022 How the performance of the portfolio is evaluated and reported to
senior management;
\u2022 The risks that impact the performance of the business model, and
how those risks are managed;
\u2022 How managers of the business are compensated (i.e. based on fair
value of assets managed or on the contractual cash flows collected);
and
\u2022 The frequency, value and timing of sales in prior periods, reasons for
those sales, and expectations of future sales activity.
Financial assets that are held for trading or managed within a business
model that is evaluated on a fair value basis are measured at FVTPL
because the business objective is neither hold-to-collect contractual
cash flows nor hold-to-collect-and-sell contractual cash flows.
Characteristics of the contractual cash flows
An assessment (\u2018SPPI test\u2019) is performed on all financial assets at
origination that are held within a \u2018hold-to-collect\u2019 or \u2018hold-to-collect-and-
sell\u2019 business model to determine whether the contractual terms of the
financial assets give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal outstanding.
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair
value of the financial asset at initial recognition. \u2018Interest\u2019 is defined as
consideration for the time value of money, for the credit risk associated
with the principal amount outstanding, for other basic lending risks and
costs (i.e. liquidity, administrative costs) and profit margin.
The SPPI test requires an assessment of the contractual terms and
conditions to determine whether a financial asset contains any terms
that could modify the timing or amount of contractual cash flows of the
asset, to the extent that they could not be described as solely payments
of principal and interest. In making this assessment, the Group considers:
\u2022 Features that modify the time value of money element of interest
(e.g. tenor of the interest rate does not correspond with the
frequency within which it resets);
\u2022 Terms providing for prepayment and extension;
\u2022 Leverage features;
\u2022 Contingent events that could change the amount and timing of
cash\u00a0flows;
\u2022 Terms that limit the Group\u2019s claim to cash flows from specified
assets; and
\u2022 Contractually linked instruments.
Contractual terms that introduce exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending
arrangement do not give rise to contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Investments in equity instruments
Equity instruments are classified and measured at FVTPL with gains
and losses reflected in profit or loss.
(k) Financial liabilities and equity \u2013 Notes 15, 28, 29, 30, 32, 33 and 42
The Group categorises financial liabilities as at amortised cost or as at
FVTPL.
The Group recognises a financial liability when it becomes party to the
contractual provisions of the contract.
Issued financial instruments or their components are classified as
liabilities where the substance of the contractual arrangement results in
the Group having a present obligation to either deliver cash or another
financial asset to the holder, to exchange financial instruments on terms
that are potentially unfavourable or to satisfy the obligation otherwise
than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of equity shares.
Financial liabilities are initially recognised at fair value, being their issue
proceeds (fair value of consideration received), net of transaction costs
incurred. Financial liabilities are subsequently measured at amortised
cost, with any difference between the proceeds net of transaction costs
and the redemption value recognised in the income statement using the
effective interest rate method.
1\u00a0 Accounting policies continued
(k) Financial liabilities and equity continued
Where financial liabilities are classified as trading they are also initially
recognised at fair value with the related transaction costs taken directly
to the income statement. Gains and losses arising from subsequent
changes in fair value are recognised directly in the income statement
within net trading income.
Issued financial instruments are classified as equity when the Group
has no contractual obligation to transfer cash, or other financial assets
or to issue a variable number of its own equity instruments. Incremental
costs directly attributable to the issue of equity instruments are shown
as a deduction from the proceeds of issue, net of tax.
On the extinguishment of equity instruments, gains or losses arising are
recognised net of tax directly in the statement of changes in equity.
(l) Leases \u2013 Notes 24 and 31
The Group applies a single recognition and measurement approach for
all leases, except for short-term leases of 12 months or less or leases of
low-value assets (i.e. the value of the underlying asset, when new, is
less than \u20ac 5,000/\u00a3 5,000). The Group recognises lease liabilities that
represent the present value of lease payments to be made over the
lease term and right-of-use assets representing the right to use the
underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of
the lease (i.e., the date the underlying asset is available for use). Right-
of-use assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis
over the lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease
liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments (less
any lease incentives receivable), variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group
and payments of penalties for terminating the lease, if the lease term
reflects exercising the option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised as expenses in the
period in which the event or condition that triggers the payment occurs.
(m) Determination of fair value of financial instruments \u2013 Note 43
The fair value of a financial instrument is the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in
the principal market, or in its absence, the most advantageous market
to which the Group has access at that date. The Group considers the
impact of non-performance risk when valuing its financial liabilities.
Financial instruments are initially recognised at fair value and, with the
exception of financial assets at fair value through profit or loss, the
initial carrying amount is adjusted for direct and incremental transaction
costs. In the normal course of business, the fair value on initial
recognition is the transaction price (fair value of consideration given or
received). If the Group determines that the fair value at initial
recognition differs from the transaction price and the fair value is
determined by a quoted price in an active market for the same financial
instrument, or by a valuation technique which uses only observable
market inputs, the difference between the fair value at initial recognition
and the transaction price is recognised as a gain or loss. If the fair
value is calculated by a valuation technique that features significant
market inputs that are not observable, the difference between the fair
value at initial recognition and the transaction price is deferred.
Subsequently, the difference is recognised in the income statement on
an appropriate basis over the life of the financial instrument, but no
later than when the valuation is supported by wholly observable inputs;
the transaction matures; or is closed\u00a0out.
Subsequent to initial recognition, the methods used to determine the
fair value of financial instruments include quoted prices in active
markets where those prices are considered to represent actual and
regularly occurring market transactions. Where quoted prices are not
available or are unreliable because of market inactivity, fair values are
determined using valuation techniques.
Quoted prices in active markets
Quoted market prices are used where those prices are considered to
represent actual and regularly occurring market transactions for
financial instruments in active markets.
Valuations for negotiable instruments such as debt and equity securities
are determined using bid prices for asset positions and ask prices for
liability positions.
Where securities are traded on an exchange, the fair value is based on
prices from the exchange. The market for debt securities largely
operates on an \u2018over-the-counter\u2019 basis which means that there is not
an official clearing or exchange price for these security instruments.
Therefore, market makers and/or investment banks (\u2018contributors\u2019)
publish bid and ask levels which reflect an indicative price that they are
prepared to buy and sell a\u00a0particular security. The Group\u2019s valuation
policy requires that the prices used in determining the fair value of
securities quoted in active markets must be sourced from established
market makers and/or investment banks.
Valuation techniques
In the absence of quoted market prices, and in the case of over-the-
counter derivatives, fair value is calculated using valuation techniques.
These valuation techniques maximise the use of relevant observable
inputs and minimise the use of unobservable inputs. The valuation
techniques used incorporate the factors that market participants would
take into account in pricing a transaction. Valuation techniques include
the use of recent orderly transactions between market participants,
reference to other similar instruments, option pricing models,
discounted cash flow analysis and other valuation techniques
commonly used by market participants.
Fair value may be estimated using quoted market prices for similar
instruments, adjusted for differences between the quoted instrument
and the instrument being valued. Where the fair value is calculated
using discounted cash flow analysis, the methodology is to use, to the
greatest extent possible, market data that is either directly observable
or is implied from instrument prices, such as interest rate yield curves,
equities and commodities prices, credit spreads, option volatilities and
currency rates. In addition, the Group considers the impact of own
credit risk and counterparty risk when valuing its derivative liabilities.
1\u00a0 Accounting policies continued
(m) Determination of fair value of financial instruments continued
The valuation methodology is to calculate the expected cash flows
under the terms of each specific contract and then discount these
values back to a present value. The assumptions involved in these
valuation techniques include:
\u2022 The likelihood and expected timing of future cash flows of the
instrument. These cash flows are generally governed by the terms of
the instrument, although management judgement may be required
when the ability of the counterparty to service the instrument in
accordance with the contractual terms is in doubt. In addition, future
cash flows may also be sensitive to the occurrence of future events,
including changes in market rates; and
\u2022 Selecting an appropriate discount rate for the instrument, based on
the interest rate yield curves including the determination of an
appropriate spread for the instrument over the risk-free rate. The
spread is adjusted to take into account the specific credit risk profile
of the exposure.
All adjustments in the calculation of the present value of future cash
flows are based on factors market participants would take into account
in pricing the financial instrument. Certain financial instruments
(both\u00a0assets and liabilities) may be valued on the basis of valuation
techniques that feature one or more significant market inputs that are
not observable. When applying a valuation technique with
unobservable data, estimates are made to reflect uncertainties in fair
values resulting from a lack of market data, for example, as a result of
illiquidity in the market. For these instruments, the fair value
measurement is less reliable. Inputs into valuations based on non-
observable data are inherently uncertain because there is little or no
current market data available from which to determine the price at
which an orderly transaction between market participants would occur
under current market conditions. However, in most cases there is some
market data available on which to base a determination of fair value, for
example historical data, and the fair values of most financial
instruments will be based on some market observable inputs even
where the non-observable inputs are significant. All unobservable
inputs used in valuation techniques reflect the assumptions market
participants would use when fair valuing the financial instrument.
The Group tests the outputs of the valuation model to ensure that it
reflects current market conditions. The calculation of fair value for any
financial instrument may require adjustment of the quoted price or the
valuation technique output to reflect the cost of credit risk and the
liquidity of the market, if market participants would include one, where
these are not embedded in underlying valuation techniques or prices
used.The choice of contributors, the quality of market data used for
pricing and the valuation techniques used are all subject to internal
review and approval procedures.
(n) Sale and repurchase agreements (including securities
borrowing and lending) \u2013 Notes 19 and 41
Financial assets may be lent or sold subject to a commitment to
repurchase them (\u2018repos\u2019). Such securities are retained on the
statement of financial position when substantially all the risks and
rewards of ownership remain with the Group. The liability to the
counterparty is included separately on the statement of financial
position. Similarly, when securities are purchased subject to a
commitment to resell (\u2018reverse repos\u2019), or where the Group borrows
securities, but does not acquire the risks and rewards of ownership,
the\u00a0transactions are treated as collateralised loans, and the securities
are not usually included in the statement of financial position. The
exception to this is where these are sold to third parties, at which point
the obligation to repurchase the securities is recorded as a trading
liability at fair value and any subsequent gain or loss included in trading
income. The\u00a0difference between the sale and repurchase price is
accrued over the life of the agreements using the effective interest rate
method. Securities lent to counterparties are also retained in the
financial statements.
(o) Derivatives and hedge accounting \u2013 Note 16
Derivatives, such as interest rate swaps, options and forward rate
agreements, futures, currency swaps and options, credit and equity
derivatives are used for trading purposes whereas interest rate swaps,
currency swaps, cross currency interest rate swaps and credit
derivatives are used for hedge accounting purposes.
The Group maintains trading positions in a variety of financial
instruments including derivatives. Trading transactions arise both as a
result of activity generated by customers and from proprietary trading
with a view to generating incremental income.
Non-trading derivative transactions comprise transactions held for
hedging purposes as part of the Group\u2019s risk management strategy
against assets, liabilities, positions and cash flows.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into and subsequently remeasured at fair
value. Fair values are obtained from quoted market prices in active
markets, including recent market transactions, and from valuation
techniques using discounted cash flow models and option pricing
models as appropriate. Derivatives are included in assets when their
fair value is positive, and in liabilities when their fair value is negative,
unless there is the legal ability and intention to settle an asset and
liability on a net basis.
The best evidence of the fair value of a derivative at initial recognition is
the transaction price (i.e. the fair value of the consideration given or
received) unless the fair value of that instrument is evidenced by
comparison with other observable current market transactions in the
same instrument (i.e. without modification or repackaging) or based on
a valuation technique whose variables include only data from
observable markets.
Profits or losses are only recognised on initial recognition of derivatives
when there are observable current market transactions or valuation
techniques that are based on observable market inputs.
Hedging
The Group avails of the hedge accounting requirements of IAS 39
Financial Instruments: Recognition and Measurement ('IAS 39') as
adopted by the EU, until portfolio hedge accounting is addressed by the
IASB, as permitted as an accounting policy choice under IFRS 9.
All derivatives are carried at fair value and the accounting treatment of
the resulting fair value gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item
being hedged. Where derivatives are held for risk management
purposes, and where transactions meet the criteria specified in IAS 39,
the Group designates certain derivatives as either:
\u2022 Hedges of the fair value of recognised assets or liabilities or firm
commitments (\u2018fair value hedge\u2019); or
\u2022 Hedges of the exposure to variability of cash flows attributable to a
recognised asset or liability, or a highly probable forecasted
Transaction (\u2018cash flow hedge\u2019); or
\u2022 Hedges of a net investment in a foreign operation.
1\u00a0 Accounting policies continued
(o) Derivatives and hedge accounting continued
When a financial instrument is designated as a hedge, the Group
formally documents the relationship between the hedging instrument
and hedged item as well as its risk management objectives and its
strategy for undertaking the various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or
cash flows of the hedged items.
The Group discontinues hedge accounting when:
(a) it is determined that a derivative is not, or has ceased to be, highly
effective as a hedge;
(b) the derivative expires, or is sold, terminated, or exercised;
(c) the hedged item matures or is sold or repaid; or
(d) a forecast transaction is no longer deemed highly probable.
To the extent that the changes in the fair value of the hedging derivative
differ from changes in the fair value of the hedged risk in the hedged
item, or the cumulative change in the fair value of the hedging derivative
differs from the cumulative change in the fair value of expected future
cash flows of the hedged item, ineffectiveness arises. The amount of
ineffectiveness, taking into account the timing of the expected cash flows
where relevant, provided that it is not so great as to disqualify the entire
hedge for hedge accounting, is recorded in the income statement.
In certain circumstances, the Group may decide to cease hedge
accounting even though the hedge relationship continues to be highly
effective by no longer designating the financial instrument as a hedge.
Fair value hedge accounting
Changes in fair value of derivatives that qualify and are designated as
fair value hedges are recorded in the income statement, together with
changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
For micro fair value hedges, the hedge adjustment is presented as an
adjustment to the carrying amount of the hedged item. For portfolio fair
value hedges, the aggregated fair value changes in the portfolio of
hedged items are recognised in a single separate line item within
liabilities when the hedged portfolio consists of liabilities, or within
assets when the hedged portfolio consists of assets.
If the hedge no longer meets the criteria for hedge accounting, the fair
value hedging adjustment, for items carried at amortised cost, is
amortised to profit or loss using the effective interest rate method over
the remaining maturity of the hedged item for micro hedges, and on a
straight-line basis over the relevant repricing period for macro hedges.
For debt securities measured at FVOCI, the fair value adjustment for
hedged items is recognised in the income statement using the effective
interest rate method.
When a hedged item held at amortised cost that is designated in a
micro fair value hedge or included in the repricing time-period of a
portfolio hedge is derecognised, the unamortised fair value adjustment
is recognised immediately in the income statement.
Cash flow hedge accounting
The Group enters into portfolio cash flow hedges. The effective portion
of changes in the fair value of derivatives that are designated and
qualify as cash flow hedges is initially recognised directly in other
comprehensive income and included in the cash flow hedging reserve
in the statement of changes in equity. The amount recognised in other
comprehensive income is reclassed to profit or loss as a reclassification
adjustment in the same period as the hedged cash flows affect profit or
loss, and in the same line item in the statement of comprehensive
income. Any ineffective portion of the gain or loss on the hedging
instrument is recognised in the income statement immediately.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or
loss recognised in other comprehensive income from the time when the
hedge was effective remains in equity and is reclassified to the income
statement as a reclassification adjustment as the forecast transaction
affects profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was recognised in other
comprehensive income from the period when the hedge was effective is
reclassified to the income statement.
Net investment hedge
Hedges of net investments in foreign operations, including monetary
items that are accounted for as part of the net investment, are
accounted for similarly to cash flow hedges. The effective portion of the
gain or loss on the hedging instrument is recognised in other
comprehensive income and the ineffective portion is recognised
immediately in the income statement. The cumulative gain or loss
previously recognised in other comprehensive income is recognised in
the income statement on the disposal or partial disposal of the foreign
operation. Hedges of net investments may include non-derivative
liabilities as well as derivative financial instruments.
Derivatives that do not qualify for hedge accounting
Certain derivative contracts entered into as economic hedges do not
qualify for hedge accounting and are classified as trading derivatives.
Changes in the fair value of these derivative instruments are recognised
immediately in the income statement.
(p) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights
to the cash flows from the financial asset expire or it transfers the rights
to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Group neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset.
On derecognition of a financial asset, the difference between the
carrying amount of the asset and the sum of (i) the consideration
received (including any new asset obtained less any new liability
assumed) and (ii) any cumulative gain or loss that had been recognised
in OCI is recognised in profit or loss. Relevant costs incurred with the
disposal of a financial asset are deducted in computing the gain or loss
on disposal.
Any interest in transferred financial assets that qualify for derecognition,
that is created or retained by the Group, is recognised as a separate asset
or liability.
The Group enters into transactions whereby it transfers assets
recognised on its statement of financial position, but retains either all or
substantially all of the risks and rewards of the transferred assets or a
portion of them. In such cases, the transferred assets are not
derecognised. Examples of such transactions are securities sold under
agreements to repurchase.
In transactions in which the Group neither retains nor transfers
substantially all of the risks and rewards of ownership of a financial
asset and it retains control over the asset, the Group continues to
recognise the asset to the extent of its continuing involvement,
determined by the extent to which it is exposed to changes in the value
of the transferred asset.
In certain transactions, the Group retains the obligation to service the
transferred financial asset for a fee. The transferred asset is
derecognised if it meets the derecognition criteria. An asset or liability is
recognised for the servicing contract if the servicing fee is more than
adequate or is less than adequate for performing the servicing.
1\u00a0 Accounting policies continued
(p) Derecognition continued
The write-off of a financial asset constitutes a derecognition event.
Where a financial asset is partially written-off, and the portion written-off
comprises specifically identified cash flows, this will constitute a
derecognition event for that part written-off.
Financial liabilities
The Group derecognises a financial liability when its contractual
obligations are discharged, cancelled or expired. Any gain or loss on
the extinguishment or remeasurement of a financial liability is
recognised in profit or loss.
(q) Impairment of financial assets \u2013 Notes 11, 20 and 34
The Group recognises loss allowances for expected credit losses at
each balance sheet date for the following financial instruments that are
not measured at FVTPL:
\u2022 Financial assets at amortised cost;
\u2022 Financial assets at FVOCI (except for equity instruments);
\u2022 Lease receivables;
\u2022 Financial guarantee contracts issued; and
\u2022 Loan commitments issued.
Investments in equity instruments are recognised at fair value and
accordingly, expected credit losses (\u2018ECLs\u2019) are not recognised
separately for equity instruments.
ECLs are the weighted average of credit losses. When measuring
ECLs, the Group takes into account:
\u2022 Probability-weighted outcomes;
\u2022 The time value of money so that ECLs are discounted to the
reporting date; and
\u2022 Reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The amount of ECLs recognised as a loss allowance depends on the
extent of credit deterioration since initial recognition. There are two
measurement bases:
\u2022 12-month ECLs (Stage 1), which applies to all items as long as there
is no significant deterioration in credit quality since initial recognition;
and
\u2022 Lifetime ECLs (Stages 2 and 3), which applies when a significant
increase in credit risk has occurred on an individual or collective basis.
The 12 month ECL is the portion of lifetime expected credit losses that
represent the expected credit losses that result from default events on
a\u00a0financial instrument that are possible within the 12 months after the
reporting date. Lifetime ECL is the expected credit losses that result from
all possible default events over the expected life of a financial instrument.
In the case of Stage 2, credit risk on the financial instrument has
increased significantly since initial recognition but the instrument is not
considered credit impaired. For a financial instrument in Stage 3, credit
risk has increased significantly since initial recognition and the
instrument is considered credit impaired.
Financial assets are allocated to stages dependent on credit quality
relative to when the asset was originated.
A financial asset can only originate in either Stage 1 or as purchased or
originated credit impaired (\u2018POCI\u2019). The ECL held against an asset
depends on a number of factors, one of which is its stage allocation. Assets
allocated to Stage 2 and Stage 3 have lifetime ECLs. Collateral and other
credit enhancements are not considered as part of stage allocation.
Collateral is reflected in the Group\u2019s loss given default models (\u2018LGD\u2019).
Purchased or originated credit impaired
POCI financial assets are those that are credit-impaired on initial
recognition. The Group may originate a credit-impaired financial asset
following a substantial modification of a distressed financial asset that
resulted in derecognition of the original financial asset.
POCIs are financial assets originated credit impaired that have a
discount to the contractual value when measured at fair value. The
Group uses an appropriate discount rate for measuring ECL in the case
of POCIs which is the credit-adjusted EIR. This rate is used to discount
the expected cash flows of such assets to fair value on initial recognition.
POCIs remain outside of the normal stage allocation process for the
lifetime of the obligation. The ECL for POCIs is always measured at
an\u00a0amount equal to lifetime expected credit losses. The amount
recognised as a loss allowance for these assets is the cumulative
changes in lifetime expected credit losses since the initial recognition
of\u00a0the assets rather than the total amount of lifetime expected
credit\u00a0losses.
At each reporting date, the Group recognises the amount of the change
in lifetime expected credit losses as a credit impairment gain or loss in
the income statement. Favourable changes in lifetime expected credit
losses are recognised as a credit impairment gain, even if the
favourable changes exceed the amount previously recognised in profit
or loss as a credit impairment loss.
Modification
From time to time, the Group will modify the original terms of a
customer\u2019s loan either as part of the ongoing relationship or arising
from changes in the customer\u2019s circumstances such as when that
customer is unable to make the agreed original contractual
repayments.
A modification refers to either:
\u2022 A change to the previous terms and conditions of a debt contract; or
\u2022 A total or partial refinancing of a debt contract.
Modifications may occur for both customers in distress and for those not
in distress. Any financial asset that undergoes a change or renegotiation
of cash flows and is not derecognised is a modified financial asset.
When modification does not result in derecognition, the modified assets
are treated as the same continuous lending agreement and a
modification gain or loss is taken to profit or loss immediately. The
gross carrying amount of the financial asset is recalculated as the
present value of the renegotiated or modified contractual cash flows
discounted at the financial asset\u2019s original effective interest rate. Any
costs or fees incurred adjust the carrying amount of the modified
financial asset and are amortised over the remaining term of the
modified financial asset.
The stage allocation for modified assets which are not derecognised is\u00a0by
reference to the credit risk at initial recognition of the original, unmodified
contractual terms i.e. the date of initial recognition is not\u00a0reset.
Where renegotiation of the terms of a financial asset leads to
a\u00a0customer granting equity to the Group in exchange for any loan
balance outstanding, the new instrument is recognised at fair value
with\u00a0any difference to the loan carrying amount recognised in the
income statement.
Derecognition occurs if a modification or restructure is substantial on
a\u00a0qualitative or quantitative basis. Accordingly, certain forborne assets
are derecognised. The modified/restructured asset (derecognised
forborne asset (\u2018DFA\u2019)) is considered a \u2018new financial instrument\u2019
and\u00a0the date that the new asset is recognised is the date of initial
recognition from this point forward. DFAs are allocated to Stage 1
on\u00a0origination and follow the normal staging process thereafter.
1\u00a0 Accounting policies continued
(q) Impairment of financial assets continued
If there is evidence of credit impairment at the time of initial recognition
of a DFA, the asset is deemed to be a POCI. POCIs are not allocated
to stages but are assigned a lifetime PD and ECL for the duration of the
obligation\u2019s life. Where the modification/restructure of a non-forborne
credit obligation results in derecognition, the new loan is originated in
Stage 1 and follows the normal staging process thereafter.
Collateralised financial assets \u2013 Repossessions
The ECL calculation for a collateralised financial asset reflects the cash
flows that may result from foreclosure, costs for obtaining and settling
the collateral, and whether or not foreclosure is probable.
For loans that are credit impaired, the Group may repossess collateral
previously pledged as security in order to achieve an orderly realisation
of the loan. The Group will then offer this repossessed collateral for sale.
However, if the Group believes the proceeds of the sale will comprise
only part of the recoverable amount of the loan with the customer
remaining liable for any outstanding balance, the loan continues to be
recognised and\u00a0the repossessed asset is not recognised. However, if
the Group believes that the sale proceeds of the asset will comprise all
or substantially all of the recoverable amount of the loan, the loan is
derecognised and the acquired asset is accounted for in accordance
with the applicable accounting standard. Any further impairment of the
repossessed asset is treated as an impairment of that asset and not as
a credit impairment of\u00a0the original\u00a0loan.
Financial assets at FVOCI
The ECL allowance for financial assets measured at FVOCI does not
reduce the carrying amount in the statement of financial position
because the carrying amount of these assets is fair value. However, an
amount equal to the ECL allowance that would arise if the assets were
measured at amortised cost is recognised in other comprehensive
income (\u2018OCI\u2019) as an accumulated credit impairment amount, with a
corresponding charge to profit or loss. The accumulated loss
recognised in OCI is recycled to the profit or loss upon derecognition of
the assets (together with other accumulated gains and losses in OCI).
Write-offs and debt forgiveness
The Group reduces the gross carrying amount of a financial asset
either partially or fully when there is no reasonable expectation
of\u00a0recovery.
Where there is no formal debt forgiveness agreed with the customer,
the Group may write off a loan either partially or fully when there is no
reasonable expectation of recovery. This is considered a non-
contracted write-off. In this case, the borrower remains fully liable for
the credit obligation and is not advised of the write-off.
Once a financial asset is written-off either partially or fully, the amount
written-off cannot subsequently be recognised on the balance sheet. It
is only when cash is received in relation to the amount written-off that
income is recognised in the income statement as a \u2018recovery of bad
debt previously written-off.
Debt forgiveness arises where there is a formal contract agreed with
the customer for the write-off of a loan.
(r) Collateral and netting
The Group enters into master netting agreements with counterparties,
to ensure that if an event of default occurs, all amounts outstanding
with those counterparties will be settled on a net basis.
Collateral
The Group obtains collateral in respect of customer advances where
this is considered appropriate. The collateral normally takes the form of
a lien over the customer\u2019s assets and gives the Group a claim on these
assets for both existing and future customer liabilities. The collateral is,
in general, not recorded on the statement of financial position.
The Group also receives collateral in the form of cash or securities in
respect of other credit instruments, such as securities borrowing contracts
and derivative contracts in order to reduce credit risk. Collateral received in
the form of securities is not recorded on the statement of financial position.
Collateral received in the form of cash is recorded on the statement of
financial position with a corresponding liability. Therefore, in the case of
cash collateral, these amounts are assigned to deposits received from
banks or other counterparties. Any interest payable or receivable arising is
recorded as interest expense or interest income respectively.
In certain circumstances, the Group will pledge collateral in respect of
its own liabilities or borrowings. Collateral pledged in the form of
securities or loans and advances continues to be recorded on the
statement of financial position. Collateral paid away in the form of cash
is recorded in loans and advances to banks or customers. Any interest
payable or receivable arising is recorded as interest expense or interest
income respectively.
Netting
Financial assets and financial liabilities are offset and the net amount
reported on the statement of financial position if, and only if, there is a
currently enforceable legal right to set off the recognised amounts and
there is an intention to settle on a net basis, or to realise the asset and
settle the liability simultaneously. This is not generally the case with
master netting agreements, therefore, the related assets and liabilities
are presented gross on the statement of financial position.
(s) Financial guarantees and loan commitment contracts \u2013 Note 39
Financial guarantees provided by the Group
Financial guarantees are given to banks, financial institutions and other
bodies on behalf of customers to secure loans, overdrafts and other
banking facilities (\u2018facility guarantees\u2019) and to other parties in
connection with the performance of customers under obligations
relating to contracts, advance payments made by other parties,
tenders, retentions and the payment of import duties. In its normal
course of business, Allied Irish Banks, p.l.c. (the principal operating
company) may issue financial guarantees to other Group entities.
A loan commitment is a contract with a borrower to provide a loan or
credit on specified terms at a future date. The contract may or may not
be cancelled unconditionally at any time without notice depending on
the terms of the contract.
The origination date for financial guarantees and loan commitment
contracts is the date when the contracts become irrevocable. The credit
risk at this date is used to determine if a significant increase in credit
risk has subsequently occurred.
Financial guarantees and loan commitments are initially recognised
in\u00a0the financial statements at fair value on the date that the guarantee
is\u00a0given. Subsequent to initial recognition, the Group applies the
impairment provisions of IFRS 9 and calculates an ECL allowance for
financial guarantees and loan commitment contracts (i.e. those that are
not measured at FVTPL).\u00a0
The ECL allowance calculated on financial guarantees and loan
commitment contracts is reported within Provisions for liabilities
and\u00a0commitments.
1\u00a0 Accounting policies continued
(s) Financial guarantees and loan commitment contracts
continued
Financial guarantees purchased by the Group
The Group enters into financial guarantee contracts which require the
counter-party to the contract to reimburse the Group for a loss it incurs
when the credit risk of the borrower significantly deteriorates. The
Group enters into financial guarantee contracts which require the
counter-party to the contract to reimburse the Group for a loss it incurs
when the credit risk of the borrower significantly deteriorates. This is
settled periodically by reducing the liability associated with the credit
linked notes.The reimbursement asset is settled periodically by
reducing the liability associated with the credit linked notes.
(t) Property, plant and equipment \u2013 Note 24
Property, plant and equipment are stated at cost, or deemed cost,
less\u00a0accumulated depreciation and provisions for impairment, if any.
Additions and subsequent expenditures are capitalised only to the
extent that they enhance the future economic benefits expected to be
derived from the asset. No depreciation is provided on freehold land.
Property, plant and equipment are depreciated on a straight line basis
over their estimated useful economic lives. Depreciation is calculated
based on the gross carrying amount, less the estimated residual value
at the end of the assets\u2019 economic lives.
The Group uses the following useful lives when calculating depreciation:
Asset type
Useful life
Freehold buildings and long-leasehold
property
50 years
Short leasehold property
life of lease, up to 50 years
Costs of adaptation of freehold and
leasehold property
Branch properties
up to 10 years1
Office properties
up to 15 years1
Computers and similar equipment
3 \u2013 7 years
Fixtures and fittings and other equipment
5 \u2013 10 years
1. Subject to the maximum remaining life of the lease.
The Group depreciates right-of-use assets arising under lease
obligations from the commencement date of a lease to the earlier of the
end of the useful life of the right-of-use asset and the end of the lease
term on a straight line basis.
The Group reviews its depreciation rates, at least annually, to take
account of any change in circumstances. When deciding on useful lives
and methods, the principal factors that the Group takes into account
are the expected rate of technological developments and expected
market requirements for, and the expected pattern of usage of, the
assets. When reviewing residual values, the Group estimates the
amount that it would currently obtain for the disposal of the asset, after
deducting the estimated cost of disposal if the asset was already of the
age and condition expected at the end of its useful life.
Gains and losses on disposal of property, plant and equipment are
included in the income statement. It is Group policy not to revalue its
property, plant and equipment.
(u) Intangible assets \u2013 Note 23
Computer software and other intangible assets
Computer software and other intangible assets are stated at cost,
less\u00a0amortisation on a straight line basis and provisions for impairment,
if any. The identifiable and directly associated external and internal
costs of acquiring and developing software are capitalised where the
software is controlled by the Group, and where it is probable that future
economic benefits that exceed its cost will flow from its use over more
than one year. Costs associated with maintaining software are
recognised as an expense when incurred. Capitalised computer
software is amortised over 3 to 9 years. Other intangible assets are
amortised over the life of the asset. Computer software and other
intangible assets are reviewed for impairment when there is an
indication that the asset may be impaired. Intangible assets not yet
available for use are reviewed for impairment on an annual\u00a0basis.
Acquired intangible assets
Customer related intangible assets and brands acquired in a business
combination are recognised at fair value at acquisition date.
Customer related intangible assets and brands have a finite useful life
and are carried at cost less accumulated amortisation and provision for
impairment, if any. Amortisation is calculated using the straight line
basis to allocate the cost over their estimated useful life (6 years).
(v) Non-credit risk provisions \u2013 Note 34
Provisions are recognised for present legal or constructive obligations
arising as consequences of past events where it is probable that a
transfer of economic benefit will be necessary to settle the obligation,
and it can be reliably estimated.
When the effect is material, provisions are determined by discounting
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the
risks specific to the liability. Payments are deducted from the present
value of the provision, and interest at the relevant discount rate is
charged annually to interest expense using the effective interest rate
method. These are reported within \u2018provisions for liabilities and
commitments\u2019 in the statement of financial position.
(w) Share capital and reserves \u2013 Notes 35, 36, 37 and 50
Share capital
Share capital represents funds raised by issuing shares in return for
cash or other consideration. Share capital comprises ordinary shares of
the entity.
Dividends and distributions
Final dividends on ordinary shares are recognised as a liability in the
Group\u2019s financial statements in the period in which they are approved
by the shareholders of the Company. Proposed dividends that are
declared after the end of the reporting date are not recognised as a
liability, they are disclosed in note 50.
Other equity interests
Other equity interests include:
\u2022 Additional Tier 1 Perpetual Contingent Temporary Write-down
Securities (AT1s) (note 36); and
\u2022 Warrants to acquire a fixed number of the company shares for
a\u00a0fixed\u00a0amount of currency are classified as equity instruments
and\u00a0are recognised on initial recognition at the fair value of
consideration received.
Distributions on the AT1s are recognised in equity when approved for
payment by the Board of Directors.
Capital contributions
Capital contributions represent the receipt of non-refundable
considerations arising from transactions with the Irish Government
(note 46). These contributions comprise both financial and non-financial
net assets. The contributions are classified as equity and may be either
distributable or non-distributable. Capital contributions are distributable
if the assets received are in the form of cash or another asset that is
readily convertible to cash, otherwise, they are treated as non-
distributable. Capital contributions in the statement of financial position
arose during 2011 from (a) an EBS transaction and (b) non-refundable
receipts from the Irish Government and the National Pension Reserve
Fund Commission (\u2018NPRFC\u2019).
1\u00a0 Accounting policies continued
(w) Share capital and reserves continued
The capital contribution from the EBS transaction is treated as
non\u2011distributable as the related net assets received were largely
non\u2011cash in nature.
Non-refundable receipts of \u20ac 6,054 million from the Irish Government
and the NPRFC are distributable. These are included in revenue
reserves.
Investment securities reserves
Investment securities reserves represent the net unrealised gain or
loss, net of tax, arising from the recognition in the statement of financial
position of investment securities at FVOCI.
On disposal of equity securities which had been designated at FVOCI
on initial recognition, any amounts held in the investment securities
reserves account is transferred directly to revenue reserves without
recycling through profit or loss.
Cash flow hedging reserves
Cash flow hedging reserves represent the net gains or losses, net of
tax, on effective cash flow hedging instruments that will be reclassified
to the income statement when the hedged transaction affects profit
or\u00a0loss.
Revenue reserves
Revenue reserves include the following:
\u2022 Retained earnings of the parent company and its subsidiaries;
\u2022 The Group\u2019s share of its joint venture and associated undertakings
post-acquisition profits or losses;
\u2022 Amounts transferred from issued share capital, share premium,
revaluation reserves and capital redemption reserves following Irish
High Court approval;
\u2022 Amounts arising from the capital reduction which followed the
\u2018Scheme\u00a0of Arrangement\u2019 undertaken by the Group in December 2017;
\u2022 Remeasurements of defined benefit pension schemes; and
\u2022 Transactions with owners including distributions and buybacks.
Merger reserve
The merger reserve arose following the Scheme of Arrangement
approved by the Irish High Court in December 2017 where a new
company, AIB\u00a0Group plc (\u2018the Company\u2019), was introduced as the
holding company of AIB Group (note 37).
In the consolidated financial statements of AIB Group plc, the carrying
value of the investment in Allied Irish Banks, p.l.c. by AIB Group plc
was eliminated against the share capital and share premium account
in\u00a0Allied Irish Banks, p.l.c. and the merger reserve in AIB Group plc
resulting in a\u00a0negative merger reserve.
(x) Cash and cash equivalents \u2013 Notes 44 and 45
For the purposes of the cash flow statement, cash comprises cash
on\u00a0hand and demand deposits, and cash equivalents comprise highly
liquid investments that are convertible into cash with an insignificant
risk of changes in value and with a maturity of less than three months
from the date of acquisition.
(y) Adoption of new accounting standards and amendments to standards
The table below outlines the new standards and amendments to standards that have been adopted by the Group for the year ended
31\u00a0December\u00a02024. The Group has not early adopted any standard or amendment that has been issued but is not yet effective.\u00a0
Accounting standard update
Effective date
IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Annual periods beginning on or after 1 January 2024.
Nature of change
Impact
Specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the seller-lessee
does not recognise any amount of the gain or loss that relates to the right of use
it\u00a0retains.
The amendments had no impact on the Group\u2019s financial statements.
Accounting standard update
Effective date
IAS 1 Presentation of Financial Statements : Classification of Liabilities as
Current\u00a0or\u00a0Non-current and Non\u2011current Liabilities with Covenants
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the requirements on determining whether a liability is current or non-
current and requires additional disclosures when a liability arising from a loan
agreement is classified as non-current and the entity\u2019s right to defer settlement
is\u00a0contingent on compliance with future covenants within twelve months.
Accounting standard update
Effective date
IFRS 7 Financial Instruments: Disclosures (\u2018IFRS 7\u2019) and IAS 7 Statement of
Cash Flows (\u2018IAS 7\u2019): Disclosures: Supplier Finance Arrangements
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the characteristics of supplier finance arrangements with additional
disclosure requirements intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity\u2019s
liabilities, cash flows and exposure to liquidity risk as they apply to entities that
enter into supplier finance arrangements with third parties.
1\u00a0 Accounting policies continued
(z) Prospective accounting changes
The table below outlines the amendments to existing standards which have been approved by the IASB, but not early adopted by the Group,
that\u00a0will impact the Group\u2019s financial reporting in future periods. The Group will consider the impact of these amendments as the situation requires.
The amendments which are most relevant to the Group are as follows:
Accounting standard update
Effective date
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates:
Lack\u00a0of Exchangeability
Annual reporting periods beginning on or after 1 January 2025.
Impact
Nature of change
These amendments are not expected to have a material impact on the Group.
Clarifies whether a currency is exchangeable into another currency, and which
spot exchange rate to use when it is not.
Accounting standard update
\u2022 Add new disclosures for certain instruments with contractual terms that can
change cash flows (such as some financial instruments with features linked to
the achievement of environment, social and governance targets); and
\u2022 Update the disclosures for equity instruments designated at FVOCI.
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures
Nature of change
The amendments:
\u2022 Clarify the date of recognition and derecognition of some financial assets and
liabilities,with a new exception for some financial liabilities settled through an
electronic cash transfer system;
\u2022 Clarify and add further guidance for assessing whether a financial asset meets
the SPPI criterion;
Effective date
Annual reporting periods beginning on or after 1 January 2026 and will apply
retrospectively. Not yet endorsed by the EU.
Impact
The Group is currently evaluating the impact that the amendments will have on its
financial statements.
Accounting standard update
Effective date
Annual Improvements to IFRS \u2013 Volume 11
Annual reporting periods beginning on or after 1 January 2026. Not yet endorsed
by the EU.
Nature of change
Limited amendments to IFRS 1 First-time Adoption of International Financial
Reporting Standards, IFRS 7, IFRS 9, IFRS 10 Consolidated Financial
Statements (\u2018IFRS 10\u2019) and IAS 7 that either clarify the wording of an IFRS
standard or correct relatively minor unintended consequences, oversights or
conflicts between requirements in the standards.
Impact
These amendments are not expected to have a material impact on the Group.
Accounting standard update
Effective date
IFRS 18 Presentation and Disclosure in Financial Statements
Annual reporting periods beginning on or after 1 January 2027 and will apply
retrospectively. Not yet endorsed by the EU.
Nature of change
Introduces new requirements to present specified categories and defined
subtotals in the statement of profit or loss, provide disclosures on management-
defined performance measures (\u2018MPMs\u2019) in the notes to the financial statements
and improve aggregation and disaggregation.
Impact
The Group is currently evaluating the impact that IFRS 18 will have on its financial
statements.
Accounting standard update
Effective date
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Annual reporting periods beginning on or after 1 January 2027. Not yet endorsed
by the EU.
Nature of change
Optional for certain eligible subsidiaries of parent entities that report under IFRS
Accounting Standards to apply reduced disclosure requirements.
Impact
The Company is not eligible to apply IFRS 19 in its consolidated or company
financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-535": { "value": "
(a) Reporting entity
AIB Group plc (\u2018the parent company\u2019 or \u2018the Company\u2019) is a company
domiciled in Ireland. The address of the Company\u2019s registered office is
10 Molesworth Street, Dublin 2, Ireland. AIB Group plc is registered
under the Companies Act 2014 as a public limited company under the
company number 594283 and is the holding company of the Group.
The consolidated financial statements for the year ended 31 December
2024 include the financial statements of AIB Group plc and its subsidiary
undertakings, collectively referred to as \u2018AIB Group\u2019 or \u2018the Group\u2019,
where appropriate, including certain structured entities and the Group\u2019s
interest in associates/joint ventures using the equity method of
accounting and are prepared to the end of the financial period. The
Group is and has been primarily involved in retail and corporate banking.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-536": { "value": "AIB Group plc", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-537": { "value": "AIB Group plc", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-538": { "value": "AIB Group plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-539": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-540": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-541": { "value": "10 Molesworth Street, Dublin 2, Ireland", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-542": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-543": { "value": "public limited company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-544": { "value": "retail and corporate banking", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-545": { "value": "
(b) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Accounting Standards and International
Financial Reporting Standards (collectively 'IFRSs') as adopted by the
European Union ('EU') and applicable for the financial year ended
31\u00a0December 2024. The consolidated financial statements also comply
with those parts of the Companies Act 2014 and the European Union
(Credit Institutions: Financial Statements) Regulations 2015 applicable
to companies reporting under IFRS, and the Asset Covered Securities
Acts 2001 and 2007 and Article 4 of the IAS Regulation. The
accounting policies have been consistently applied by Group entities
and are consistent with the previous year, unless otherwise described.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-546": { "value": "
(c) Basis of preparation
Functional and presentation currency
The financial statements are presented in Euro, which is the functional
currency of the parent company and a significant number of its
subsidiaries, rounded to the nearest million.
Basis of measurement and presentation
The financial statements have been prepared under the historical cost
basis, with the exception of the following assets and liabilities which are
stated at their fair value: derivative financial instruments, financial
instruments at fair value through profit or loss, certain hedged financial
assets and financial liabilities and investment securities at fair value
through other comprehensive income ('FVOCI'). The carrying values of
recognised assets and liabilities that are hedged items in fair value
hedges, other than portfolio hedges, and otherwise carried at amortised
cost, are adjusted to record changes in fair value attributable to the
risks that are being hedged.
The financial statements comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated
statement of financial position, the consolidated statement of cash
flows, and the consolidated statement of changes in equity together
with the related notes. The financial statements include the information
that is described as being an integral part of the audited financial
statements contained in: (i) Sections 2.1, 2.2, 2.3 and 2.4 of the
Risk\u00a0Management Report as described further on page 179 and
(ii)\u00a0the\u00a0Directors' remuneration section of the Corporate Governance
Remuneration Statement as described further on pages 163 and 165.
Change in presentation for certain items in the primary statements
The Group has changed the presentation of reserves in the
consolidated statement of changes in equity to better align with the
presentation in the consolidated statement of financial position. The
related comparatives for 2023 have been re-presented.
Change in presentation for certain notes to the financial statements
(i) Segmental information
The Group has changed the presentation in note 3 following the
introduction of the new Climate Capital segment. The related
comparatives for 2023 have been re-presented. For further information,
please refer to page 283.
The Group has also changed the description of certain line items in the
'Net fee and commission income' table in note 3 to more appropriately
reflect the nature of the fee and commission income and expenses.
\u2018Foreign exchange fees\u2019 was changed to \u2018customer related foreign
exchange\u2019, \u2018credit related fees\u2019 was changed to \u2018lending related fees\u2019,
\u2018specialised payment services fees\u2019 was changed to \u2018specialised
payment services fees (Payzone)\u2019 and \u2018specialised payment services
expenses\u2019 was changed to \u2018specialised payment services expenses
(Payzone)\u2019.
(ii) Derivative financial instruments
In 2024 the Group revised the maturity analysis disclosure to better align
it with the current maturity profile of the Group\u2019s hedging instruments.
The related comparatives for 2023 have been re-presented.
(iii) Provisions for liabilities and commitments
The Group has presented legal claims, customer redress and other
provisions as separate classes of provisions in 2024. Belfry related
provisions, the FSPO provision and other individually immaterial
customer redress provisions (which were previously presented within
other provisions) are now all presented as customer redress provisions.\u00a0
The related comparatives for 2023 have been re-presented. The\u00a0Group
has also changed the description of the related line item in the
operating expenses note from 'restitution and associated costs' to
'customer redress'.
(iv) Credit risk
The Group has changed the presentation of certain credit risk tables.\u00a0
The related comparatives for 2023 have been re-presented. For further
information please refer to \u2018Post model adjustments\u2019 on page 200 and
\u2018Indexed loan-to-value ratios of the Group\u2019s residential mortgage
portfolio\u2019 on page 221.
Adoption of new accounting policies
The Group commenced portfolio fair value hedging to hedge on-demand
deposits and current accounts with low/zero fixed interest rates and
entered into a credit risk transfer transaction in 2024. The policies are
described in \u2018(o) derivatives and hedge accounting\u2019 and \u2018(s) financial
guarantees and loan commitment contracts\u2019 respectively.
Use of judgements and estimates
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
policies and reported amounts of certain assets, liabilities, revenues
and expenses, and disclosures of contingent assets and liabilities. The
estimates and assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. Since management\u2019s judgement may involve making
estimates concerning the likelihood of future events, the actual results
could differ from those estimates. The estimates and assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any
future period affected. The judgements that have a significant effect on
the consolidated financial statements and estimates with a significant
risk of material adjustment in the next year relate to:
\u2022 Impairment of financial assets;
\u2022 Deferred taxation;
\u2022 Retirement benefit obligations; and
\u2022 Provisions for liabilities and commitments.
A\u00a0description of these judgements and estimates is set\u00a0out in note 2.
1\u00a0 Accounting policies continued
(c) Basis of preparation continued
Consideration of climate change
In preparing the financial statements, the Directors have considered the
impact of climate change, particularly in the context of the risks identified
in the \u2018Sustainability Statement\u2019 in this Annual Financial Report. There
has been no material impact identified on the financial reporting
judgements and estimates of the Group. In particular, the Directors
considered the impact of climate change in respect of the following areas:
\u2022 Credit risk: The impact of climate risk on the management,
escalating and reporting of credit risk was considered by the Group.
There is currently no reasonable and supportable information that
indicates a material impact of climate change on estimated credit
losses ('ECL') at a macro level and the Group\u2019s approach to
individual counterparty risk assessment adequately captures climate
risk where appropriate.
\u2022 Going concern and viability: The assessment of the group\u2019s going
concern and viability over the next three years did not identify
material climate-related risks, both in terms of our decarbonisation
commitments and the physical risks from climate change. This is set
out in further detail on page 171.\u00a0
\u2022 Provisions and contingent liabilities: The Group\u2019s publicly
announced commitment to reduce absolute Scope 1 greenhouse gas
(\u2018GHG\u2019) emissions 34% by 2027 from a 2019 base year and to
increase annual sourcing of renewable electricity from 1% in 2019 to
100% by 2030 are not considered a constructive obligation or a
contingent liability. The timeframe allows opportunities for the Group
to evolve its plans for how the decarbonisation strategy will be met
and therefore the Group should not currently recognise a provision or
a contingent liability in relation to its commitment (i.e. as the Group
does not have an obligation as a result of a past event). IAS 37
Provisions, Contingent Liabilities and Contingent Assets sets out that
it is only those obligations arising from past events existing
independently of an entity's future actions that are recognised as
provisions or disclosed as contingent liabilities.
\u2022 Impairment of non-financial assets: The Group applies the
requirements of IAS 36 Impairment of Assets in assessing whether
impacted assets are impaired at a reporting date. The Group has a
robust process to identify assets that may be impaired which requires the
identification of all material potential impairment triggers including
identification of climate related impairment triggers. The Group\u2019s
impairment charge for 2024 includes the impact of the Greener Branches
Refurbishments Programme to improve branch and office buildings\u2019
energy efficiency. In\u202faddition, the Group\u2019s published decarbonisation
commitments do not impact the useful lives of the Group\u2019s impacted
assets as the Group proposes to replace impacted assets as their useful
lives expire. In 2024, the Group continued our phased approach to
transitioning our fleet, which is on track for full electrification by 2027.
Going concern
The financial statements for the year ended 31 December 2024 have
been prepared on a going concern basis as the Directors are satisfied,
having considered the risks and uncertainties impacting the Group, that it
has the ability to continue in business for the period of assessment. In
making this assessment, the Directors have considered a wide range of
information relating to present and future conditions. This includes capital
forecasts and internally generated stress scenarios to take account of
geopolitical risks, the impacts of inflation, increased interest rates and
related impacts on unemployment and property prices. The period of
assessment used by the Directors is at least 12\u00a0months from the date of
approval of these annual financial statements.
(y) Adoption of new accounting standards and amendments to standards
The table below outlines the new standards and amendments to standards that have been adopted by the Group for the year ended
31\u00a0December\u00a02024. The Group has not early adopted any standard or amendment that has been issued but is not yet effective.\u00a0
Accounting standard update
Effective date
IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Annual periods beginning on or after 1 January 2024.
Nature of change
Impact
Specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the seller-lessee
does not recognise any amount of the gain or loss that relates to the right of use
it\u00a0retains.
The amendments had no impact on the Group\u2019s financial statements.
Accounting standard update
Effective date
IAS 1 Presentation of Financial Statements : Classification of Liabilities as
Current\u00a0or\u00a0Non-current and Non\u2011current Liabilities with Covenants
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the requirements on determining whether a liability is current or non-
current and requires additional disclosures when a liability arising from a loan
agreement is classified as non-current and the entity\u2019s right to defer settlement
is\u00a0contingent on compliance with future covenants within twelve months.
Accounting standard update
Effective date
IFRS 7 Financial Instruments: Disclosures (\u2018IFRS 7\u2019) and IAS 7 Statement of
Cash Flows (\u2018IAS 7\u2019): Disclosures: Supplier Finance Arrangements
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the characteristics of supplier finance arrangements with additional
disclosure requirements intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity\u2019s
liabilities, cash flows and exposure to liquidity risk as they apply to entities that
enter into supplier finance arrangements with third parties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-547": { "value": "
Functional and presentation currency
The financial statements are presented in Euro, which is the functional
currency of the parent company and a significant number of its
subsidiaries, rounded to the nearest million.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-548": { "value": "
Change in presentation for certain notes to the financial statements
(i) Segmental information
The Group has changed the presentation in note 3 following the
introduction of the new Climate Capital segment. The related
comparatives for 2023 have been re-presented. For further information,
please refer to page 283.
The Group has also changed the description of certain line items in the
'Net fee and commission income' table in note 3 to more appropriately
reflect the nature of the fee and commission income and expenses.
\u2018Foreign exchange fees\u2019 was changed to \u2018customer related foreign
exchange\u2019, \u2018credit related fees\u2019 was changed to \u2018lending related fees\u2019,
\u2018specialised payment services fees\u2019 was changed to \u2018specialised
payment services fees (Payzone)\u2019 and \u2018specialised payment services
expenses\u2019 was changed to \u2018specialised payment services expenses
(Payzone)\u2019.
(ii) Derivative financial instruments
In 2024 the Group revised the maturity analysis disclosure to better align
it with the current maturity profile of the Group\u2019s hedging instruments.
The related comparatives for 2023 have been re-presented.
(iii) Provisions for liabilities and commitments
The Group has presented legal claims, customer redress and other
provisions as separate classes of provisions in 2024. Belfry related
provisions, the FSPO provision and other individually immaterial
customer redress provisions (which were previously presented within
other provisions) are now all presented as customer redress provisions.\u00a0
The related comparatives for 2023 have been re-presented. The\u00a0Group
has also changed the description of the related line item in the
operating expenses note from 'restitution and associated costs' to
'customer redress'.
(iv) Credit risk
The Group has changed the presentation of certain credit risk tables.\u00a0
The related comparatives for 2023 have been re-presented. For further
information please refer to \u2018Post model adjustments\u2019 on page 200 and
\u2018Indexed loan-to-value ratios of the Group\u2019s residential mortgage
portfolio\u2019 on page 221.", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-550": { "value": "
Adoption of new accounting policies
The Group commenced portfolio fair value hedging to hedge on-demand
deposits and current accounts with low/zero fixed interest rates and
entered into a credit risk transfer transaction in 2024. The policies are
described in \u2018(o) derivatives and hedge accounting\u2019 and \u2018(s) financial
guarantees and loan commitment contracts\u2019 respectively.
(y) Adoption of new accounting standards and amendments to standards
The table below outlines the new standards and amendments to standards that have been adopted by the Group for the year ended
31\u00a0December\u00a02024. The Group has not early adopted any standard or amendment that has been issued but is not yet effective.\u00a0
Accounting standard update
Effective date
IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Annual periods beginning on or after 1 January 2024.
Nature of change
Impact
Specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the seller-lessee
does not recognise any amount of the gain or loss that relates to the right of use
it\u00a0retains.
The amendments had no impact on the Group\u2019s financial statements.
Accounting standard update
Effective date
IAS 1 Presentation of Financial Statements : Classification of Liabilities as
Current\u00a0or\u00a0Non-current and Non\u2011current Liabilities with Covenants
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the requirements on determining whether a liability is current or non-
current and requires additional disclosures when a liability arising from a loan
agreement is classified as non-current and the entity\u2019s right to defer settlement
is\u00a0contingent on compliance with future covenants within twelve months.
Accounting standard update
Effective date
IFRS 7 Financial Instruments: Disclosures (\u2018IFRS 7\u2019) and IAS 7 Statement of
Cash Flows (\u2018IAS 7\u2019): Disclosures: Supplier Finance Arrangements
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the characteristics of supplier finance arrangements with additional
disclosure requirements intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity\u2019s
liabilities, cash flows and exposure to liquidity risk as they apply to entities that
enter into supplier finance arrangements with third parties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-549": { "value": "
Adoption of new accounting policies
The Group commenced portfolio fair value hedging to hedge on-demand
deposits and current accounts with low/zero fixed interest rates and
entered into a credit risk transfer transaction in 2024. The policies are
described in \u2018(o) derivatives and hedge accounting\u2019 and \u2018(s) financial
guarantees and loan commitment contracts\u2019 respectively.
(y) Adoption of new accounting standards and amendments to standards
The table below outlines the new standards and amendments to standards that have been adopted by the Group for the year ended
31\u00a0December\u00a02024. The Group has not early adopted any standard or amendment that has been issued but is not yet effective.\u00a0
Accounting standard update
Effective date
IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Annual periods beginning on or after 1 January 2024.
Nature of change
Impact
Specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the seller-lessee
does not recognise any amount of the gain or loss that relates to the right of use
it\u00a0retains.
The amendments had no impact on the Group\u2019s financial statements.
Accounting standard update
Effective date
IAS 1 Presentation of Financial Statements : Classification of Liabilities as
Current\u00a0or\u00a0Non-current and Non\u2011current Liabilities with Covenants
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the requirements on determining whether a liability is current or non-
current and requires additional disclosures when a liability arising from a loan
agreement is classified as non-current and the entity\u2019s right to defer settlement
is\u00a0contingent on compliance with future covenants within twelve months.
Accounting standard update
Effective date
IFRS 7 Financial Instruments: Disclosures (\u2018IFRS 7\u2019) and IAS 7 Statement of
Cash Flows (\u2018IAS 7\u2019): Disclosures: Supplier Finance Arrangements
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the characteristics of supplier finance arrangements with additional
disclosure requirements intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity\u2019s
liabilities, cash flows and exposure to liquidity risk as they apply to entities that
enter into supplier finance arrangements with third parties.
1\u00a0 Accounting policies continued
(z) Prospective accounting changes
The table below outlines the amendments to existing standards which have been approved by the IASB, but not early adopted by the Group,
that\u00a0will impact the Group\u2019s financial reporting in future periods. The Group will consider the impact of these amendments as the situation requires.
The amendments which are most relevant to the Group are as follows:
Accounting standard update
Effective date
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates:
Lack\u00a0of Exchangeability
Annual reporting periods beginning on or after 1 January 2025.
Impact
Nature of change
These amendments are not expected to have a material impact on the Group.
Clarifies whether a currency is exchangeable into another currency, and which
spot exchange rate to use when it is not.
Accounting standard update
\u2022 Add new disclosures for certain instruments with contractual terms that can
change cash flows (such as some financial instruments with features linked to
the achievement of environment, social and governance targets); and
\u2022 Update the disclosures for equity instruments designated at FVOCI.
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures
Nature of change
The amendments:
\u2022 Clarify the date of recognition and derecognition of some financial assets and
liabilities,with a new exception for some financial liabilities settled through an
electronic cash transfer system;
\u2022 Clarify and add further guidance for assessing whether a financial asset meets
the SPPI criterion;
Effective date
Annual reporting periods beginning on or after 1 January 2026 and will apply
retrospectively. Not yet endorsed by the EU.
Impact
The Group is currently evaluating the impact that the amendments will have on its
financial statements.
Accounting standard update
Effective date
Annual Improvements to IFRS \u2013 Volume 11
Annual reporting periods beginning on or after 1 January 2026. Not yet endorsed
by the EU.
Nature of change
Limited amendments to IFRS 1 First-time Adoption of International Financial
Reporting Standards, IFRS 7, IFRS 9, IFRS 10 Consolidated Financial
Statements (\u2018IFRS 10\u2019) and IAS 7 that either clarify the wording of an IFRS
standard or correct relatively minor unintended consequences, oversights or
conflicts between requirements in the standards.
Impact
These amendments are not expected to have a material impact on the Group.
Accounting standard update
Effective date
IFRS 18 Presentation and Disclosure in Financial Statements
Annual reporting periods beginning on or after 1 January 2027 and will apply
retrospectively. Not yet endorsed by the EU.
Nature of change
Introduces new requirements to present specified categories and defined
subtotals in the statement of profit or loss, provide disclosures on management-
defined performance measures (\u2018MPMs\u2019) in the notes to the financial statements
and improve aggregation and disaggregation.
Impact
The Group is currently evaluating the impact that IFRS 18 will have on its financial
statements.
Accounting standard update
Effective date
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Annual reporting periods beginning on or after 1 January 2027. Not yet endorsed
by the EU.
Nature of change
Optional for certain eligible subsidiaries of parent entities that report under IFRS
Accounting Standards to apply reduced disclosure requirements.
Impact
The Company is not eligible to apply IFRS 19 in its consolidated or company
financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-551": { "value": "
Use of judgements and estimates
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
policies and reported amounts of certain assets, liabilities, revenues
and expenses, and disclosures of contingent assets and liabilities. The
estimates and assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. Since management\u2019s judgement may involve making
estimates concerning the likelihood of future events, the actual results
could differ from those estimates. The estimates and assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any
future period affected. The judgements that have a significant effect on
the consolidated financial statements and estimates with a significant
risk of material adjustment in the next year relate to:
\u2022 Impairment of financial assets;
\u2022 Deferred taxation;
\u2022 Retirement benefit obligations; and
\u2022 Provisions for liabilities and commitments.
A\u00a0description of these judgements and estimates is set\u00a0out in note 2.
2\u00a0 Critical accounting judgements and
estimates
The accounting judgements that have the most significant effect on the
amounts recognised in the financial statements, and the estimates that
have a significant risk of material adjustment in the next year are set
out below.
Significant judgements
The significant judgements made by the Group in applying its
accounting policies are as follows:
\u2022 Deferred taxation;
\u2022 Impairment of financial assets; and
\u2022 Provisions for liabilities and commitments.
The application of certain of these judgements also involves
estimations which are discussed separately.
Deferred taxation
The Group\u2019s accounting policy for deferred tax is set out in accounting
policy (i) in note 1. Details of the Group\u2019s deferred tax assets and
liabilities are set out in note 26.
The Group\u2019s key judgement in relation to the recoverability of deferred
tax assets for unused tax losses is that it is probable that there will be
sufficient future taxable profits against which those losses can be used:
\u2022 The disclosed estimated utilisation period for those losses in
Ireland is within the timeframe that taxable profits are considered
probable; and
\u2022 Taxable profits are considered more likely than not in the UK for
a\u00a0period of 15 years.
Deferred tax assets are recognised for unused tax losses to the extent
that it is probable that there will be sufficient future taxable profits
against which the losses can be used. For a company with a history
of\u00a0recent losses, there must be other convincing evidence to underpin
this assessment.
The recognition of these deferred tax assets relies on the assessment
of future profitability and the sufficiency of those profits to absorb losses
carried forward. It requires significant judgements to be made about the
projection of long-term future profitability because of the period over
which recovery extends.
In assessing the future profitability of the Group, the Board has
considered a range of positive and negative evidence for this purpose.
Among this evidence, the principal positive factors include:
\u2022 AIB as a pillar bank with a strong Irish franchise;
\u2022 The absence of any expiry dates for Irish and UK tax losses;
\u2022 The changing banking landscape in Ireland;
\u2022 External economic forecasts for Ireland, with growth forecasted for
2025;
\u2022 The Irish economy remained robust in 2024, outperforming European
peers, driven by domestic and FDI sectors;
\u2022 The recent inorganic activity of the Group;
\u2022 The turnaround evident in the Group's financial performance over the
years 2021-2024;
\u2022 The introduction of the bank resolution framework under the BRRD
and the establishment in 2017 of AIB Group plc as the new holding
company of the Group. This provides greater confidence in relation
to the future viability of Allied Irish Banks, p.l.c. (as the principal
operating bank subsidiary) as there are now effective tools in place
that should facilitate its recapitalisation in a future crisis; and
\u2022 The non-enduring nature of the loan impairments at levels which
resulted in the losses between 2009 and 2013.
The Board also considered negative evidence and the inherent
uncertainties in any long-term financial assumptions and projections,
including:
\u2022 The absolute level of deferred tax assets compared to the Group\u2019s
equity;
\u2022 The quantum of profits required to be earned and the extended
period over which it is projected that the tax losses will be utilised;
\u2022 The challenge of forecasting over a long period, taking account of the
changing level of competition, and the evolving interest rate environment;
\u2022 The globalised nature of the Irish economy and its exposure to
macroeconomic headwinds and geopolitical issues; and
\u2022 Taxation changes (including Organisation for Economic Co-operation
and Development ('OECD') tax reform) and the likelihood of future
developments and their impact on profitability.
Taking account of all relevant factors, and in the absence of any expiry
date for tax losses in Ireland, it is more likely than not that there will be
future profits in the medium term, and beyond, in the relevant Irish
Group companies against which to use the tax losses. In this regard,
the\u00a0Group has carried out an exercise to determine the likely number
of\u00a0years required to utilise the deferred tax asset under the following
scenario. Using the Group\u2019s financial plan 2025 to 2027 as a base and a
profit growth rate of 2% from 2027, it was assessed that it will take less
than 10 years for the Irish deferred tax asset (\u20ac 2.0 billion) to be utilised.
If the growth rate assumption was decreased by 1%, then the utilisation
period would increase by c.1 year. The Group\u2019s analysis of this and
other scenarios examined would not alter the basis of recognition or the
current carrying value. In 2023, the Group reported that it expected that
it would take less than 13 years for the deferred tax asset to be utilised
with 80% being utilised within 10 years.
Given the relative size of the Group\u2019s operations in the UK compared
to\u00a0the role that the Irish operations play in supporting a functioning
banking environment, a different judgement has been applied to the
period that taxable profits are considered more likely than not in the
UK. Despite the absence of any expiry date for tax losses in the UK,
the Group has concluded that the recognition of deferred tax assets in
its UK subsidiary be limited to the amount projected to be realised
within a time period of 15 years. This is the timescale within which the
Group believes that it can assess the likelihood of its UK profits arising
as being more likely than not.
Impairment of financial assets
The Group\u2019s accounting policy for impairment of financial assets is set
out in accounting policy (q) in note 1. Details of the Group\u2019s net credit
impairment charge are set out in note 11 and ECL allowance on
financial assets are set out in note 20.
The calculation of the ECL allowance is complex and requires the use
of a number of accounting judgements.
The most significant judgements applied by the Group in determining
the ECL allowance are as follows:
\u2022 Determining the criteria for a significant increase in credit risk and
for being classified as credit impaired; and
\u2022 Determining the need for and an appropriate methodology for
post\u2011model adjustments.
The significant management judgement and the governance process,
relating to ECL, are set out on pages 187 to 201 in the Risk
Management section.
2\u00a0 Critical accounting judgements and
estimates continued
Provisions for liabilities and commitments
The Group\u2019s accounting policy for provisions for liabilities and
commitments is set out in accounting policy (v) in note 1. Details of the
Group\u2019s provisions for liabilities and commitments are shown in note
34.
Significant management judgement is required to determine whether
the Group has a present obligation as a result of a past event and
whether it is probable that an outflow of resources will be required to
settle the obligation.
The Group recognises liabilities where it has present legal or
constructive obligations as a result of past events and it is more likely
than not that these obligations will result in an outflow of resources
to\u00a0settle the obligations and the amount can be reliably estimated.
Judgement is required in determining whether the Group has a present
obligation and whether it is probable that an outflow of economic benefits
will be required to settle this obligation. This judgement is applied to
information available at the time of determining the provision including,
but not limited to, judgements around interpretations of legislation,
regulations and case law depending on the nature of the\u00a0provision.
Critical accounting estimates
The accounting estimates with a significant risk of material adjustment
to the carrying amounts of assets and liabilities within the next financial
year were in relation to:
\u2022 Impairment of financial assets; and
\u2022 Retirement benefit obligations.
Impairment of financial assets
The Group\u2019s accounting policy for impairment of financial assets is set
out in accounting policy (q) in note 1. Details of the Group\u2019s expected
credit loss ('ECL') allowance are set out in note 20.
The key estimates and assumptions that the Group have used in
determining the ECL allowance are as follows:
\u2022 Establishing the number and relative weightings for forward looking
scenarios;
\u2022 Inputs into discounted cash-flows (\u2018DCFs\u2019) for certain stage 3 credit
impaired obligors;
\u2022 The assumptions for measuring ECL (e.g. PD, LGD and EAD and
the parameters to be included within the models for modelled ECL);
and
\u2022 The estimation of post model adjustments where required.
The calculation of the ECL allowance is complex and therefore the
Group must consider large amounts of information in its determination.
This process requires significant use of estimates and assumptions,
some of which by their nature, are highly subjective and very sensitive
to risk factors such as changes to economic conditions. Changes in the
ECL allowance can materially affect net income.
On an ongoing basis, the various estimates and assumptions are
reviewed in light of differences between actual and previously
calculated expected losses. These are then recalibrated and refined to
reflect current and evolving economic conditions. The ECL allowance
is, in turn, reviewed and approved by the Group Credit Committee on a
quarterly basis with final Group levels being approved by the Board
Audit Committee. Further detail on the ECL governance process is set
out on page 187.
The macroeconomic variables used in models to calculate ECL
allowance are based on assumptions, forecasts and estimates
against\u00a0a backdrop of an evolving economic landscape. Accordingly,
developments in local and international factors could have a material
bearing on the ECL allowance within the next financial year. The
Group\u2019s sensitivity to a range of macroeconomic factors under the (i)
base forecast; (ii) upside; and (iii) downside scenarios is set out on
pages 194 to 199 of the Risk Management section of this report.
DCFs are the most significant input to the ECL calculation for Stage 3
credit impaired borrowers where the gross credit exposure is greater
than or equal to \u20ac 1 million for Ireland or greater than or equal to
\u00a3 500,000 for the UK. Collateral valuations and the estimated time to
realisation of collateral is a key component of the DCF model. The DCF
assessment produces a base case ECL which is then adjusted,
considering all relevant and supportable information, including but not
limited to, historical data analysis, predictive modelling and
management judgement, to incorporate the impact of multiple
scenarios on the base ECL.
The Group has developed a standard approach for the measurement of
ECL for the majority of the Group\u2019s exposures where each ECL input
parameter (e.g. PD, LGD and EAD) is developed in line with standard
modelling methodology. These are discussed further on pages 192 to
193 of the Risk Management section. When considering changes in
these assumptions collectively, there is a significant risk of a material
adjustment to the Group\u2019s ECL allowance within the next financial year.
Where the estimate of ECL does not adequately capture all available
forward looking information about the range of possible outcomes, or
where there is a significant degree of uncertainty, management may
consider it appropriate for an adjustment to ECL. These are referred
to\u00a0as post model adjustments and are set out in detail on pages 200
and 201.
2\u00a0 Critical accounting judgements and
estimates continued
Impairment of financial assets continued
The sensitivity of the carrying amounts of the ECL to changes in
assumptions and estimates relating to inputs into DCFs for certain
Stage 3 credit impaired obligors; the assumptions for measuring ECL;
and the estimation of post model adjustments where required have not
been provided given their diverse nature, their interrelationship and the
number of estimates and assumptions involved.
Retirement benefit obligations
The Group\u2019s accounting policy for retirement benefit obligations is set
out in accounting policy (h) in note 1. Details of the Group\u2019s retirement
benefit obligations are set out in note 27.
The key estimates and assumptions that the Group have used in
determining the retirement benefit obligation are as follows:
\u2022 In a situation where the Group believes the Trustee has the ability to
grant discretionary increases without any funding being provided by
the Group, the Group has assumed that the Trustee will grant
increases and as a result the scheme\u2019s liabilities include an estimate
for this matter; and
\u2022 The significant demographic and financial actuarial assumptions used
to determine the present value of the retirement benefit obligation.
The Trustee of the Irish Scheme has awarded an increase, in certain
years, in respect of pensions eligible for discretionary pension in
payment increases notwithstanding a decision by the Group not to fund
such increases. This reflected the ability of the Trustee to grant an
increase when the financial position of the scheme would enable such
an increase at that point in time. Taking these decisions by the Trustee
into consideration, the long term assumption for future increases in
pension in payment reflects an assessment of the Trustee\u2019s ability to
grant further increases without any funding from the Group, capped at a
long-term inflation assumption.
Having taken actuarial advice, the Group has adopted a rate of 1.90%
(31\u00a0December 2023: 2.05%) for the long-term assumption for future
discretionary increases in pensions in payment (which is the lower of
either the surplus available to the Trustee to distribute or the long-term
inflation assumption). This increased the scheme liabilities by
\u20ac\u00a0808\u00a0million at 31 December 2024 (31 December 2023: \u20ac 822 million).
A sensitivity analysis for the rate of increase in pensions in payment is
not provided, as this rate is dependent on the surplus available to the
Trustee to distribute and the advice of the actuary.
The actuarial valuation of the schemes\u2019 liabilities is dependent upon a
number of financial and demographic assumptions which are inherently
uncertain. Changes to those assumptions could materially impact the
reported amount for schemes\u2019 liabilities and the actuarial gains/losses
reported in equity. Details of the assumptions adopted by the Group
in\u00a0calculating the schemes\u2019 liabilities and a sensitivity analysis for the
principal assumptions used to measure the schemes\u2019 liabilities are
set\u00a0out in note 27 to the financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-552": { "value": "Impairment of non-financial assets: The Group applies the
requirements of IAS 36 Impairment of Assets in assessing whether
impacted assets are impaired at a reporting date. The Group has a
robust process to identify assets that may be impaired which requires the
identification of all material potential impairment triggers including
identification of climate related impairment triggers. The Group\u2019s
impairment charge for 2024 includes the impact of the Greener Branches
Refurbishments Programme to improve branch and office buildings\u2019
energy efficiency. In\u202faddition, the Group\u2019s published decarbonisation
commitments do not impact the useful lives of the Group\u2019s impacted
assets as the Group proposes to replace impacted assets as their useful
lives expire. In 2024, the Group continued our phased approach to
transitioning our fleet, which is on track for full electrification by 2027.
Computer software and other
intangible assets are reviewed for impairment when there is an
indication that the asset may be impaired. Intangible assets not yet
available for use are reviewed for impairment on an annual\u00a0basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-553": { "value": "
Going concern
The financial statements for the year ended 31 December 2024 have
been prepared on a going concern basis as the Directors are satisfied,
having considered the risks and uncertainties impacting the Group, that it
has the ability to continue in business for the period of assessment. In
making this assessment, the Directors have considered a wide range of
information relating to present and future conditions. This includes capital
forecasts and internally generated stress scenarios to take account of
geopolitical risks, the impacts of inflation, increased interest rates and
related impacts on unemployment and property prices. The period of
assessment used by the Directors is at least 12\u00a0months from the date of
approval of these annual financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-554": { "value": "
(d) Basis of consolidation \u2013 Notes 13, 22 and 40
The consolidated financial statements comprise the financial statements
of\u00a0the Group and its subsidiaries including controlled structured entities.
Subsidiary undertakings
Subsidiary undertakings are all entities (including structured entities)
over\u00a0which the group has control. The Group controls an entity where
the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiary
undertakings are fully consolidated from the date on which control is
transferred to the Group. They are derecognised from the date that
control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated, unless the transaction provides evidence of
an impairment of the transferred asset. Accounting policies of
subsidiaries have been updated where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are
shown separately in the consolidated income statement, statement of
comprehensive income, statement of changes in equity and
consolidated statement of financial position respectively.
If the Group loses control over a subsidiary undertaking, it
derecognises the related assets (including goodwill), liabilities,
non\u2011controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss.
Investments accounted for using the equity method
The Group\u2019s investments accounted for using the equity method
comprise its investments in associates and joint ventures.
An associated undertaking is an entity over which the Group has
significant influence, but not control, over the entity\u2019s operating and
financial policy decisions. If the Group holds 20% or more of the voting
power of an entity, it is presumed that the Group has significant
influence, unless it can be clearly demonstrated that this is not
the\u00a0case.
A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of
the\u00a0arrangement.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group\u2019s
share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group\u2019s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
Where the Group\u2019s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group\u2019s interest in
these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Since the goodwill that forms part of the carrying amount of the
investment in an associate is not recognised separately, it is, therefore,
not tested for impairment separately. Instead, the entire amount of the
investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate
may be impaired.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-555": { "value": "
Subsidiary undertakings
Subsidiary undertakings are all entities (including structured entities)
over\u00a0which the group has control. The Group controls an entity where
the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiary
undertakings are fully consolidated from the date on which control is
transferred to the Group. They are derecognised from the date that
control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated, unless the transaction provides evidence of
an impairment of the transferred asset. Accounting policies of
subsidiaries have been updated where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are
shown separately in the consolidated income statement, statement of
comprehensive income, statement of changes in equity and
consolidated statement of financial position respectively.
If the Group loses control over a subsidiary undertaking, it
derecognises the related assets (including goodwill), liabilities,
non\u2011controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-558": { "value": "
Investments accounted for using the equity method
The Group\u2019s investments accounted for using the equity method
comprise its investments in associates and joint ventures.
An associated undertaking is an entity over which the Group has
significant influence, but not control, over the entity\u2019s operating and
financial policy decisions. If the Group holds 20% or more of the voting
power of an entity, it is presumed that the Group has significant
influence, unless it can be clearly demonstrated that this is not
the\u00a0case.
A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of
the\u00a0arrangement.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group\u2019s
share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group\u2019s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
Where the Group\u2019s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group\u2019s interest in
these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Since the goodwill that forms part of the carrying amount of the
investment in an associate is not recognised separately, it is, therefore,
not tested for impairment separately. Instead, the entire amount of the
investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate
may be impaired.
1\u00a0 Accounting policies continued
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-557": { "value": "
Investments accounted for using the equity method
The Group\u2019s investments accounted for using the equity method
comprise its investments in associates and joint ventures.
An associated undertaking is an entity over which the Group has
significant influence, but not control, over the entity\u2019s operating and
financial policy decisions. If the Group holds 20% or more of the voting
power of an entity, it is presumed that the Group has significant
influence, unless it can be clearly demonstrated that this is not
the\u00a0case.
A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of
the\u00a0arrangement.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group\u2019s
share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group\u2019s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
Where the Group\u2019s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group\u2019s interest in
these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Since the goodwill that forms part of the carrying amount of the
investment in an associate is not recognised separately, it is, therefore,
not tested for impairment separately. Instead, the entire amount of the
investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate
may be impaired.
1\u00a0 Accounting policies continued
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-556": { "value": "
Investments accounted for using the equity method
The Group\u2019s investments accounted for using the equity method
comprise its investments in associates and joint ventures.
An associated undertaking is an entity over which the Group has
significant influence, but not control, over the entity\u2019s operating and
financial policy decisions. If the Group holds 20% or more of the voting
power of an entity, it is presumed that the Group has significant
influence, unless it can be clearly demonstrated that this is not
the\u00a0case.
A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of
the\u00a0arrangement.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group\u2019s
share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group\u2019s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
Where the Group\u2019s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group\u2019s interest in
these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Since the goodwill that forms part of the carrying amount of the
investment in an associate is not recognised separately, it is, therefore,
not tested for impairment separately. Instead, the entire amount of the
investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate
may be impaired.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-559": { "value": "
(e) Foreign currency translation
Items included in the financial statements of each of the Group\u2019s entities
are measured using their functional currency, being the currency of the
primary economic environment in which the entity operates.
Transactions and balances
Foreign currency transactions are translated into the respective entity\u2019s
functional currency using the exchange rates prevailing at the dates of
the transactions. Monetary assets and liabilities denominated in foreign
currencies are re-translated at the rate prevailing at the period-end.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the re-translation at period end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement.
Exchange differences on equities and similar non-monetary items held
at fair value through profit or loss are reported as part of the fair value
gain or loss. Exchange differences on a financial instruments
designated as a hedge of the net investment in a foreign operation are
reported in other comprehensive income.
Foreign operations
The results and financial position of all Group entities that have
a\u00a0functional currency different from the Euro are translated into Euro
as\u00a0follows:
\u2022 Assets and liabilities including goodwill and fair value adjustments
arising on consolidation of foreign operations are translated at the
closing rate;
\u2022 Income and expenses are translated into Euro at the average rates
of\u00a0exchange during the period where these rates approximate to
the\u00a0foreign exchange rates ruling at the dates of the transactions;
\u2022 Foreign currency translation differences are recognised in other
comprehensive income; and
\u2022 Since 1 January 2004, the Group\u2019s date of transition to IFRS, all
such exchange differences are included in the foreign currency
cumulative translation reserve within shareholders\u2019 equity. When a
foreign operation is disposed of in full, the relevant amount of this
reserve is transferred to the income statement. When a subsidiary is
partly disposed, the relevant proportion of foreign currency
translation reserve is re-attributed to the non-controlling interest. In
the case of a partial disposal, a pro-rata amount of the foreign
currency cumulative translation reserve is transferred to the income
statement. A partial disposal is also considered to have occurred
when a formal decision has been made to wind down an entity and
where capital is being repaid but there has not been a reduction in
the Group\u2019s overall percentage holding.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-562": { "value": "
(f) Interest income and expense recognition \u2013 Notes 4 and 5
Interest income and expense is recognised in the income statement
using the effective interest rate method.
Effective interest rate
The effective interest rate is the rate that exactly discounts the estimated
future cash payments or receipts through the expected life of the
financial instrument to:
\u2022 The gross carrying amount of the financial asset; or
\u2022 The amortised cost of the financial liability.
The application of the method has the effect of recognising income
receivable and expense payable on the instrument evenly in proportion
to the amount outstanding over the period to maturity or repayment.
In\u00a0calculating the effective interest rate for financial instruments, the
Group estimates cash flows (using projections based on its experience
of customers\u2019 behaviour) considering all contractual terms of the
financial instrument but excluding expected credit losses (except,
in\u00a0the\u00a0case of POCI financial assets where expected credit losses are
included in the calculation of a credit-adjusted effective interest rate).
The calculation takes into account all fees, including those for any
expected early redemption, and points paid or received between parties
to the contract that are an integral part of the effective interest rate, as
well as transaction costs and all other premiums and discounts.
All costs associated with mortgage incentive schemes are included in
the effective interest rate calculation. Fees and commissions payable to
third parties in connection with lending arrangements, where these are
direct and incremental costs related to the issue of a financial instrument,
are included in interest income as part of the effective interest rate.
Amortised cost and gross carrying amount
The amortised cost of a financial asset or financial liability is the
amount at which the financial asset or financial liability is measured at
initial recognition minus the principal repayments, plus or minus the
cumulative amortisation using the effective interest rate method of any
difference between the initial amount and the maturity amount and, for
financial assets, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost
before adjusting for any loss allowance.
Calculation of interest income and interest expense
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit impaired) or to the amortised cost of the liability.
For financial assets that have become credit impaired subsequent to
initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is
no longer credit impaired, the calculation of interest income reverts to
the gross basis.
However, for financial assets that were credit impaired on initial
recognition, interest income is calculated by applying the credit
adjusted effective interest rate to the amortised cost of the financial
asset. The calculation of interest income does not revert to a gross
basis, even if the credit risk of the asset improves.
When a financial asset is no longer credit impaired or has been repaid
in full (i.e. cured without financial loss), the Group presents previously
unrecognised interest income as a reversal of credit impairment/
recovery of amounts previously written-off.
Interest income and expense on financial assets and liabilities
classified as\u00a0held for trading or at fair value through profit or loss
(\u2018FVTPL\u2019) is recognised in \u2018other interest income and similar income\u2019 or
\u2018interest expense\u2019 in the income statement, as applicable.
1\u00a0 Accounting policies continued
(f) Interest income and expense recognition continued
Presentation
Interest income and expense presented in the consolidated income
statement include:
\u2022 Interest on financial assets and financial liabilities measured at
amortised cost calculated on an effective interest rate basis;
\u2022 Interest on investment debt securities measured at FVOCI calculated
on an effective interest rate basis;
\u2022 Net interest income and expense on qualifying hedge derivatives
designated as cash flow hedges or fair value hedges which are
recognised in interest income or interest expense;
\u2022 Net interest income or expense on derivatives that are held with
hedging intent, but for which hedge accounting is not applied;
\u2022 Interest income and funding costs of trading portfolio financial assets;
\u2022 Interest income and expense on leases and hire purchase contracts;
and
\u2022 Interest income on financial assets at FVTPL.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-561": { "value": "
(f) Interest income and expense recognition \u2013 Notes 4 and 5
Interest income and expense is recognised in the income statement
using the effective interest rate method.
Effective interest rate
The effective interest rate is the rate that exactly discounts the estimated
future cash payments or receipts through the expected life of the
financial instrument to:
\u2022 The gross carrying amount of the financial asset; or
\u2022 The amortised cost of the financial liability.
The application of the method has the effect of recognising income
receivable and expense payable on the instrument evenly in proportion
to the amount outstanding over the period to maturity or repayment.
In\u00a0calculating the effective interest rate for financial instruments, the
Group estimates cash flows (using projections based on its experience
of customers\u2019 behaviour) considering all contractual terms of the
financial instrument but excluding expected credit losses (except,
in\u00a0the\u00a0case of POCI financial assets where expected credit losses are
included in the calculation of a credit-adjusted effective interest rate).
The calculation takes into account all fees, including those for any
expected early redemption, and points paid or received between parties
to the contract that are an integral part of the effective interest rate, as
well as transaction costs and all other premiums and discounts.
All costs associated with mortgage incentive schemes are included in
the effective interest rate calculation. Fees and commissions payable to
third parties in connection with lending arrangements, where these are
direct and incremental costs related to the issue of a financial instrument,
are included in interest income as part of the effective interest rate.
Amortised cost and gross carrying amount
The amortised cost of a financial asset or financial liability is the
amount at which the financial asset or financial liability is measured at
initial recognition minus the principal repayments, plus or minus the
cumulative amortisation using the effective interest rate method of any
difference between the initial amount and the maturity amount and, for
financial assets, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost
before adjusting for any loss allowance.
Calculation of interest income and interest expense
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit impaired) or to the amortised cost of the liability.
For financial assets that have become credit impaired subsequent to
initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is
no longer credit impaired, the calculation of interest income reverts to
the gross basis.
However, for financial assets that were credit impaired on initial
recognition, interest income is calculated by applying the credit
adjusted effective interest rate to the amortised cost of the financial
asset. The calculation of interest income does not revert to a gross
basis, even if the credit risk of the asset improves.
When a financial asset is no longer credit impaired or has been repaid
in full (i.e. cured without financial loss), the Group presents previously
unrecognised interest income as a reversal of credit impairment/
recovery of amounts previously written-off.
Interest income and expense on financial assets and liabilities
classified as\u00a0held for trading or at fair value through profit or loss
(\u2018FVTPL\u2019) is recognised in \u2018other interest income and similar income\u2019 or
\u2018interest expense\u2019 in the income statement, as applicable.
1\u00a0 Accounting policies continued
(f) Interest income and expense recognition continued
Presentation
Interest income and expense presented in the consolidated income
statement include:
\u2022 Interest on financial assets and financial liabilities measured at
amortised cost calculated on an effective interest rate basis;
\u2022 Interest on investment debt securities measured at FVOCI calculated
on an effective interest rate basis;
\u2022 Net interest income and expense on qualifying hedge derivatives
designated as cash flow hedges or fair value hedges which are
recognised in interest income or interest expense;
\u2022 Net interest income or expense on derivatives that are held with
hedging intent, but for which hedge accounting is not applied;
\u2022 Interest income and funding costs of trading portfolio financial assets;
\u2022 Interest income and expense on leases and hire purchase contracts;
and
\u2022 Interest income on financial assets at FVTPL.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-560": { "value": "
(f) Interest income and expense recognition \u2013 Notes 4 and 5
Interest income and expense is recognised in the income statement
using the effective interest rate method.
Effective interest rate
The effective interest rate is the rate that exactly discounts the estimated
future cash payments or receipts through the expected life of the
financial instrument to:
\u2022 The gross carrying amount of the financial asset; or
\u2022 The amortised cost of the financial liability.
The application of the method has the effect of recognising income
receivable and expense payable on the instrument evenly in proportion
to the amount outstanding over the period to maturity or repayment.
In\u00a0calculating the effective interest rate for financial instruments, the
Group estimates cash flows (using projections based on its experience
of customers\u2019 behaviour) considering all contractual terms of the
financial instrument but excluding expected credit losses (except,
in\u00a0the\u00a0case of POCI financial assets where expected credit losses are
included in the calculation of a credit-adjusted effective interest rate).
The calculation takes into account all fees, including those for any
expected early redemption, and points paid or received between parties
to the contract that are an integral part of the effective interest rate, as
well as transaction costs and all other premiums and discounts.
All costs associated with mortgage incentive schemes are included in
the effective interest rate calculation. Fees and commissions payable to
third parties in connection with lending arrangements, where these are
direct and incremental costs related to the issue of a financial instrument,
are included in interest income as part of the effective interest rate.
Amortised cost and gross carrying amount
The amortised cost of a financial asset or financial liability is the
amount at which the financial asset or financial liability is measured at
initial recognition minus the principal repayments, plus or minus the
cumulative amortisation using the effective interest rate method of any
difference between the initial amount and the maturity amount and, for
financial assets, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost
before adjusting for any loss allowance.
Calculation of interest income and interest expense
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit impaired) or to the amortised cost of the liability.
For financial assets that have become credit impaired subsequent to
initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is
no longer credit impaired, the calculation of interest income reverts to
the gross basis.
However, for financial assets that were credit impaired on initial
recognition, interest income is calculated by applying the credit
adjusted effective interest rate to the amortised cost of the financial
asset. The calculation of interest income does not revert to a gross
basis, even if the credit risk of the asset improves.
When a financial asset is no longer credit impaired or has been repaid
in full (i.e. cured without financial loss), the Group presents previously
unrecognised interest income as a reversal of credit impairment/
recovery of amounts previously written-off.
Interest income and expense on financial assets and liabilities
classified as\u00a0held for trading or at fair value through profit or loss
(\u2018FVTPL\u2019) is recognised in \u2018other interest income and similar income\u2019 or
\u2018interest expense\u2019 in the income statement, as applicable.
1\u00a0 Accounting policies continued
(f) Interest income and expense recognition continued
Presentation
Interest income and expense presented in the consolidated income
statement include:
\u2022 Interest on financial assets and financial liabilities measured at
amortised cost calculated on an effective interest rate basis;
\u2022 Interest on investment debt securities measured at FVOCI calculated
on an effective interest rate basis;
\u2022 Net interest income and expense on qualifying hedge derivatives
designated as cash flow hedges or fair value hedges which are
recognised in interest income or interest expense;
\u2022 Net interest income or expense on derivatives that are held with
hedging intent, but for which hedge accounting is not applied;
\u2022 Interest income and funding costs of trading portfolio financial assets;
\u2022 Interest income and expense on leases and hire purchase contracts;
and
\u2022 Interest income on financial assets at FVTPL.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-563": { "value": "
(g) Fee and commission income \u2013 Note 3
The measurement and timing of recognition of fee and commission
income is based on the core principles of IFRS 15 Revenue from
Contracts with Customers.
Fee and commission income is recognised when the performance
obligation in the contract has been performed, either at a \u2018point in time\u2019
or \u2018over time\u2019 if the performance obligation is performed over a period of
time unless the income has been included in the effective interest
rate\u00a0calculation.
The Group includes in the transaction price, some or all of an amount
of variable consideration estimated only to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
The majority of the Group\u2019s fee and commission income arises from
retail banking activities. Loan syndication fees are recognised as
revenue when the syndication has been completed and the Group has
retained no part of the loan package for itself or retained a part at the
same effective interest rate as applicable to the other participants.
Customer related foreign exchange is fee income that is derived from
arranging foreign exchange transactions on behalf of customers.
Such\u00a0income is recognised when the individual performance obligation
has been fulfilled.
Portfolio and other management advisory and service fees are
recognised based on the applicable service contracts. Asset
management fees relating to investment funds are recognised over
time in line with the performance obligation. The same principle is
applied to the recognition of income from wealth management, financial
planning and custody services that are continuously provided over an
extended period of time.
Commitment fees together with related direct costs, for loan facilities
where drawdown is probable, are deferred and recognised as an
adjustment to the effective interest rate on the loan once drawn.
Commitment fees in relation to facilities where drawdown is not
probable are recognised over the term of the commitment on a straight
line basis. Other lending related fees are recognised over time in line
with the performance obligation except for arrangement fees where it is
likely that the facility will be drawn down, and which are included in the
effective interest rate calculation.
Fee income and fee expenses in respect of services and prepaid
credits for cellular phone and utilities sold to third parties are classified
as specialised payment services fees (Payzone) and are recognised
when the performance obligation is satisfied.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-564": { "value": "
(h) Employee benefits \u2013 Note 27
Retirement benefit obligations
The Group provides employees with post-retirement benefits mainly in
the form of pensions.
The Group operates a number of retirement benefit schemes including
defined benefit and defined contribution schemes. This includes
benefits for some members accrued from 2007 to 2013 under a hybrid
scheme arrangement that had both defined benefit and defined
contribution elements. In addition, the Group contributes, according to
local law in the various countries in which it operates, to governmental
and other schemes which have the characteristics of defined
contribution schemes.
Full actuarial valuations of defined benefit schemes are undertaken
every three years and are updated to reflect current conditions at each
year end reporting date.
Scheme assets are measured at fair value determined by using current
bid prices, except for insurance policies acquired as part of a buy in. If
the policies are qualifying policies under IAS 19 Employee Benefits and
if the timing and amount of payments under the policies exactly match
some or all of the benefits payable under the scheme, then the present
value of the related obligation is determined and is deemed to be the
fair value of the insurance policies to be included in plan assets.
Scheme liabilities are measured on an actuarial basis by estimating the
amount of future benefit that employees have earned for their service in
current and prior periods and discounting that benefit at the market
yield on a high-quality corporate bond of equivalent term and currency
to the liability. The calculation is performed by a qualified actuary using
the projected unit credit method. The difference between the fair value
of the scheme assets and the present value of the defined benefit
obligation at the year end reporting date is recognised in the statement
of financial position. Schemes in surplus are shown as assets and
schemes in deficit, together with unfunded schemes, are shown as
liabilities. A surplus is only recognised as an asset to the extent that it is
recoverable through a refund from the scheme or through reduced
contributions in the future. Actuarial gains and losses are recognised
immediately in other comprehensive income.
The cost of providing defined benefit pension schemes to employees,
comprising the net interest on the net defined benefit liability/(asset),
calculated by applying the discount rate to the net defined benefit
liability/(asset) at the start of the annual reporting period, taking into
account contributions and benefit payments during the period, is
charged to the income statement within personnel expenses.
Remeasurements of the net defined benefit liability/(asset), comprising
actuarial gains and losses and the return on scheme assets (excluding
amounts included in net interest on the net defined benefit liability/
(asset)) are recognised in other comprehensive income. Amounts
recognised in other comprehensive income in relation to
remeasurements of the net defined benefit liability/(asset) will not be
reclassified to profit or loss in a subsequent period.
1\u00a0 Accounting policies continued
(h) Employee benefits continued
The Group recognises the effect of an amendment to a defined benefit
scheme when the plan amendment occurs, which is when the Group
introduces or withdraws a defined benefit scheme, or changes the
benefits payable under existing defined benefit schemes. A\u00a0curtailment
is recognised when a significant reduction in the number of employees
covered by a defined benefit scheme occurs. A settlement is a
transaction that eliminates all further legal or constructive obligations
for part or all of the benefits provided under a defined benefit scheme.
Gains or losses on plan amendments, curtailments and settlements are
recognised in the income statement.
Changes with regard to benefits payable to retirees which represent a
constructive obligation under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets are accounted for as a past service cost. These
are recognised in the income statement.
The costs of managing the defined benefit scheme assets are deducted
from the return on scheme assets. All costs of running the defined
benefit schemes are recognised in the income statement when they
are\u00a0incurred.
The cost of the Group\u2019s defined contribution schemes is charged to the
income statement in the accounting period in which it is incurred. Any
contributions unpaid at the year end reporting date are included as a
liability. The Group has no further obligation under these schemes once
these contributions have been paid.
Short term employee benefits
Short term employee benefits, such as salaries and other benefits,
are\u00a0accounted for on an accruals basis over the period during which
employees have provided services. Bonuses are recognised to the
extent that the Group has a legal or constructive obligation to its
employees that can be measured reliably.
Retirement benefit obligations
The Group\u2019s accounting policy for retirement benefit obligations is set
out in accounting policy (h) in note 1. Details of the Group\u2019s retirement
benefit obligations are set out in note 27.
The key estimates and assumptions that the Group have used in
determining the retirement benefit obligation are as follows:
\u2022 In a situation where the Group believes the Trustee has the ability to
grant discretionary increases without any funding being provided by
the Group, the Group has assumed that the Trustee will grant
increases and as a result the scheme\u2019s liabilities include an estimate
for this matter; and
\u2022 The significant demographic and financial actuarial assumptions used
to determine the present value of the retirement benefit obligation.
The Trustee of the Irish Scheme has awarded an increase, in certain
years, in respect of pensions eligible for discretionary pension in
payment increases notwithstanding a decision by the Group not to fund
such increases. This reflected the ability of the Trustee to grant an
increase when the financial position of the scheme would enable such
an increase at that point in time. Taking these decisions by the Trustee
into consideration, the long term assumption for future increases in
pension in payment reflects an assessment of the Trustee\u2019s ability to
grant further increases without any funding from the Group, capped at a
long-term inflation assumption.
Having taken actuarial advice, the Group has adopted a rate of 1.90%
(31\u00a0December 2023: 2.05%) for the long-term assumption for future
discretionary increases in pensions in payment (which is the lower of
either the surplus available to the Trustee to distribute or the long-term
inflation assumption). This increased the scheme liabilities by
\u20ac\u00a0808\u00a0million at 31 December 2024 (31 December 2023: \u20ac 822 million).
A sensitivity analysis for the rate of increase in pensions in payment is
not provided, as this rate is dependent on the surplus available to the
Trustee to distribute and the advice of the actuary.
The actuarial valuation of the schemes\u2019 liabilities is dependent upon a
number of financial and demographic assumptions which are inherently
uncertain. Changes to those assumptions could materially impact the
reported amount for schemes\u2019 liabilities and the actuarial gains/losses
reported in equity. Details of the assumptions adopted by the Group
in\u00a0calculating the schemes\u2019 liabilities and a sensitivity analysis for the
principal assumptions used to measure the schemes\u2019 liabilities are
set\u00a0out in note 27 to the financial statements.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-566": { "value": "
(i) Income tax, including deferred income tax \u2013 Notes 14 and 26
Income tax comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates
to items recognised in other comprehensive income, in which case it
is\u00a0recognised in other comprehensive income. Income tax relating to
items in equity is recognised directly in equity. However, the income tax
consequences of payments on financial instruments that are classified
as equity but treated as liabilities for tax purposes are recognised in
profit or loss if those payments are distributions of profits previously
recognised in profit or loss.
Current tax is the expected tax payable on the taxable income for the
year using tax rates enacted or substantively enacted at the reporting
date and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the balance sheet liability
method, on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is determined using tax rates based on legislation
enacted or substantively enacted at the reporting date and is expected
to apply when the deferred tax asset is realised or the deferred tax
liability is settled. Deferred income tax assets are recognised when it is
probable that future taxable profits will be available against which the
temporary differences will be utilised. The deferred tax asset is
reviewed at the end of each reporting period and the carrying amount
will reflect the extent that it is probable that sufficient taxable profits will
be available to allow all of the asset to be recovered.
The tax effects of income tax losses available for carry forward are
recognised as an asset to the extent that it is probable that future taxable
profits will be available against which these losses can be utilised.
Deferred and current tax assets and liabilities are only offset when they
arise in the same tax reporting group and where there is both the legal
right and the intention to settle the current tax assets and liabilities on a
net basis or to realise the asset and settle the liability simultaneously.
The principal temporary differences arise from the depreciation of
property, plant and equipment, revaluation of certain financial assets
and financial liabilities including derivative contracts, provisions for
pensions and other post-retirement benefits, and in relation to
acquisitions, on the difference between the fair values of the net assets
acquired and their tax base.
Deferred income tax is provided on temporary differences arising from
investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference is controlled by the Group and
it is probable that the difference will not reverse in the foreseeable
future. In addition, temporary differences are not provided for assets
and liabilities the initial recognition of which, in a transaction that is not
a business combination, affects neither accounting nor taxable profit.
Income tax payable on profits arising from investments in subsidiaries
and associates, based on the applicable tax law in each jurisdiction, is
recognised as an expense in the period in which the profits arise.
The Group adopted the amendments to IAS 12 by the IASB
(International Tax Reform \u2013 Pillar Two Model Rules) in 2023. The
amendments provide a mandatory temporary exception from the
requirement to recognise and disclose deferred taxes arising from
enacted or substantively enacted tax law that implements the Pillar
Two\u00a0model rules. Accordingly, the Group has not recognised any
changes to its deferred tax assets or liabilities in respect of Pillar Two.
Deferred taxation
The Group\u2019s accounting policy for deferred tax is set out in accounting
policy (i) in note 1. Details of the Group\u2019s deferred tax assets and
liabilities are set out in note 26.
The Group\u2019s key judgement in relation to the recoverability of deferred
tax assets for unused tax losses is that it is probable that there will be
sufficient future taxable profits against which those losses can be used:
\u2022 The disclosed estimated utilisation period for those losses in
Ireland is within the timeframe that taxable profits are considered
probable; and
\u2022 Taxable profits are considered more likely than not in the UK for
a\u00a0period of 15 years.
Deferred tax assets are recognised for unused tax losses to the extent
that it is probable that there will be sufficient future taxable profits
against which the losses can be used. For a company with a history
of\u00a0recent losses, there must be other convincing evidence to underpin
this assessment.
The recognition of these deferred tax assets relies on the assessment
of future profitability and the sufficiency of those profits to absorb losses
carried forward. It requires significant judgements to be made about the
projection of long-term future profitability because of the period over
which recovery extends.
In assessing the future profitability of the Group, the Board has
considered a range of positive and negative evidence for this purpose.
Among this evidence, the principal positive factors include:
\u2022 AIB as a pillar bank with a strong Irish franchise;
\u2022 The absence of any expiry dates for Irish and UK tax losses;
\u2022 The changing banking landscape in Ireland;
\u2022 External economic forecasts for Ireland, with growth forecasted for
2025;
\u2022 The Irish economy remained robust in 2024, outperforming European
peers, driven by domestic and FDI sectors;
\u2022 The recent inorganic activity of the Group;
\u2022 The turnaround evident in the Group's financial performance over the
years 2021-2024;
\u2022 The introduction of the bank resolution framework under the BRRD
and the establishment in 2017 of AIB Group plc as the new holding
company of the Group. This provides greater confidence in relation
to the future viability of Allied Irish Banks, p.l.c. (as the principal
operating bank subsidiary) as there are now effective tools in place
that should facilitate its recapitalisation in a future crisis; and
\u2022 The non-enduring nature of the loan impairments at levels which
resulted in the losses between 2009 and 2013.
The Board also considered negative evidence and the inherent
uncertainties in any long-term financial assumptions and projections,
including:
\u2022 The absolute level of deferred tax assets compared to the Group\u2019s
equity;
\u2022 The quantum of profits required to be earned and the extended
period over which it is projected that the tax losses will be utilised;
\u2022 The challenge of forecasting over a long period, taking account of the
changing level of competition, and the evolving interest rate environment;
\u2022 The globalised nature of the Irish economy and its exposure to
macroeconomic headwinds and geopolitical issues; and
\u2022 Taxation changes (including Organisation for Economic Co-operation
and Development ('OECD') tax reform) and the likelihood of future
developments and their impact on profitability.
Taking account of all relevant factors, and in the absence of any expiry
date for tax losses in Ireland, it is more likely than not that there will be
future profits in the medium term, and beyond, in the relevant Irish
Group companies against which to use the tax losses. In this regard,
the\u00a0Group has carried out an exercise to determine the likely number
of\u00a0years required to utilise the deferred tax asset under the following
scenario. Using the Group\u2019s financial plan 2025 to 2027 as a base and a
profit growth rate of 2% from 2027, it was assessed that it will take less
than 10 years for the Irish deferred tax asset (\u20ac 2.0 billion) to be utilised.
If the growth rate assumption was decreased by 1%, then the utilisation
period would increase by c.1 year. The Group\u2019s analysis of this and
other scenarios examined would not alter the basis of recognition or the
current carrying value. In 2023, the Group reported that it expected that
it would take less than 13 years for the deferred tax asset to be utilised
with 80% being utilised within 10 years.
Given the relative size of the Group\u2019s operations in the UK compared
to\u00a0the role that the Irish operations play in supporting a functioning
banking environment, a different judgement has been applied to the
period that taxable profits are considered more likely than not in the
UK. Despite the absence of any expiry date for tax losses in the UK,
the Group has concluded that the recognition of deferred tax assets in
its UK subsidiary be limited to the amount projected to be realised
within a time period of 15 years. This is the timescale within which the
Group believes that it can assess the likelihood of its UK profits arising
as being more likely than not.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-565": { "value": "
(i) Income tax, including deferred income tax \u2013 Notes 14 and 26
Income tax comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates
to items recognised in other comprehensive income, in which case it
is\u00a0recognised in other comprehensive income. Income tax relating to
items in equity is recognised directly in equity. However, the income tax
consequences of payments on financial instruments that are classified
as equity but treated as liabilities for tax purposes are recognised in
profit or loss if those payments are distributions of profits previously
recognised in profit or loss.
Current tax is the expected tax payable on the taxable income for the
year using tax rates enacted or substantively enacted at the reporting
date and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the balance sheet liability
method, on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is determined using tax rates based on legislation
enacted or substantively enacted at the reporting date and is expected
to apply when the deferred tax asset is realised or the deferred tax
liability is settled. Deferred income tax assets are recognised when it is
probable that future taxable profits will be available against which the
temporary differences will be utilised. The deferred tax asset is
reviewed at the end of each reporting period and the carrying amount
will reflect the extent that it is probable that sufficient taxable profits will
be available to allow all of the asset to be recovered.
The tax effects of income tax losses available for carry forward are
recognised as an asset to the extent that it is probable that future taxable
profits will be available against which these losses can be utilised.
Deferred and current tax assets and liabilities are only offset when they
arise in the same tax reporting group and where there is both the legal
right and the intention to settle the current tax assets and liabilities on a
net basis or to realise the asset and settle the liability simultaneously.
The principal temporary differences arise from the depreciation of
property, plant and equipment, revaluation of certain financial assets
and financial liabilities including derivative contracts, provisions for
pensions and other post-retirement benefits, and in relation to
acquisitions, on the difference between the fair values of the net assets
acquired and their tax base.
Deferred income tax is provided on temporary differences arising from
investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference is controlled by the Group and
it is probable that the difference will not reverse in the foreseeable
future. In addition, temporary differences are not provided for assets
and liabilities the initial recognition of which, in a transaction that is not
a business combination, affects neither accounting nor taxable profit.
Income tax payable on profits arising from investments in subsidiaries
and associates, based on the applicable tax law in each jurisdiction, is
recognised as an expense in the period in which the profits arise.
The Group adopted the amendments to IAS 12 by the IASB
(International Tax Reform \u2013 Pillar Two Model Rules) in 2023. The
amendments provide a mandatory temporary exception from the
requirement to recognise and disclose deferred taxes arising from
enacted or substantively enacted tax law that implements the Pillar
Two\u00a0model rules. Accordingly, the Group has not recognised any
changes to its deferred tax assets or liabilities in respect of Pillar Two.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-568": { "value": "
(j) Financial assets \u2013 Notes 7, 8, 15, 17, 18, 19, 21, 25 and 42
Recognition and initial measurement
The Group initially recognises financial assets on the trade date, being
the date on which the Group commits to purchase the assets. Loan
assets are recognised when cash is advanced to borrowers. In a
situation where the Group commits to purchase financial assets under
a contract which is not considered a regular-way transaction, the assets
to be acquired are not recognised until the acquisition contract is
settled. In this case, the contract to acquire the financial asset is a
derivative that is measured at FVTPL in the period between the trade
date and the settlement date.
Financial assets measured at amortised cost or at fair value through
other comprehensive income (\u2018FVOCI\u2019) are recognised initially at fair
value adjusted for direct and incremental transaction costs. Financial
assets measured at fair value through profit or loss (\u2018FVTPL\u2019) are
recognised initially at fair value and transaction costs are taken directly
to the income statement.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into. The best evidence of the fair value of
a derivative at initial recognition is the transaction price (i.e. the fair value
of the consideration given or received) unless the fair value of that
instrument is evidenced by comparison with other observable current
market transactions in the same instrument (i.e. without modification or
repackaging) or based on a valuation technique whose variables include
only data from observable markets. Profits or losses are only recognised
on the initial recognition of derivatives when there are observable current
market transactions or valuation techniques that are based on
observable market inputs.
1\u00a0 Accounting policies continued
(j) Financial assets continued
Classification and subsequent measurement
On initial recognition, a financial asset is classified and subsequently
measured at amortised cost, FVOCI or FVTPL.
The classification and subsequent measurement of financial assets
depend on:
\u2022 The Group\u2019s business model for managing the asset; and
\u2022 The cash flow characteristics of the asset (for assets in a
\u2018hold\u2011to\u2011collect\u2019 or \u2018hold-to-collect-and-sell\u2019 business model).
Based on these factors, the Group classifies its financial assets into
one of the following categories:
\u2013 Amortised cost
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect\u2019 business model whose objective is to hold assets to
collect contractual cash flows; and whose contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest (\u2018SPPI\u2019). The carrying amount of these assets is calculated
using the effective interest rate method and is adjusted on each
measurement date by the expected credit loss allowance for each
asset, with movements recognised in profit or loss.
\u2013 Fair value through other comprehensive income (\u2018FVOCI\u2019)
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect-and-sell\u2019 business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets;
and whose contractual terms give rise on specified dates to cash flows
that are SPPI. Movements in the carrying amount of these assets are
taken through other comprehensive income (\u2018OCI\u2019), except for the
recognition of credit impairment gains or losses, interest revenue or
foreign exchange gains and losses, which are recognised in profit or
loss. When a financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to profit or
loss other than in the case of equity instruments designated at\u00a0FVOCI.
\u2013 Fair value through profit or loss (\u2018FVTPL\u2019)
Financial assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVTPL. Gains or losses (excluding interest
income or expense) on such assets are recognised in profit or loss on
an ongoing basis.
In addition, the Group may irrevocably designate a financial asset as at
FVTPL that otherwise meets the requirements to be measured at
amortised cost or at FVOCI if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Business model assessment
The Group makes an assessment of the objective of the business
model at a portfolio level, as this reflects how portfolios of assets are
managed to achieve a particular objective, rather than management\u2019s
intentions for individual assets.
The assessment considers the following:
\u2022 The strategy for the portfolio as communicated by management;
\u2022 How the performance of the portfolio is evaluated and reported to
senior management;
\u2022 The risks that impact the performance of the business model, and
how those risks are managed;
\u2022 How managers of the business are compensated (i.e. based on fair
value of assets managed or on the contractual cash flows collected);
and
\u2022 The frequency, value and timing of sales in prior periods, reasons for
those sales, and expectations of future sales activity.
Financial assets that are held for trading or managed within a business
model that is evaluated on a fair value basis are measured at FVTPL
because the business objective is neither hold-to-collect contractual
cash flows nor hold-to-collect-and-sell contractual cash flows.
Characteristics of the contractual cash flows
An assessment (\u2018SPPI test\u2019) is performed on all financial assets at
origination that are held within a \u2018hold-to-collect\u2019 or \u2018hold-to-collect-and-
sell\u2019 business model to determine whether the contractual terms of the
financial assets give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal outstanding.
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair
value of the financial asset at initial recognition. \u2018Interest\u2019 is defined as
consideration for the time value of money, for the credit risk associated
with the principal amount outstanding, for other basic lending risks and
costs (i.e. liquidity, administrative costs) and profit margin.
The SPPI test requires an assessment of the contractual terms and
conditions to determine whether a financial asset contains any terms
that could modify the timing or amount of contractual cash flows of the
asset, to the extent that they could not be described as solely payments
of principal and interest. In making this assessment, the Group considers:
\u2022 Features that modify the time value of money element of interest
(e.g. tenor of the interest rate does not correspond with the
frequency within which it resets);
\u2022 Terms providing for prepayment and extension;
\u2022 Leverage features;
\u2022 Contingent events that could change the amount and timing of
cash\u00a0flows;
\u2022 Terms that limit the Group\u2019s claim to cash flows from specified
assets; and
\u2022 Contractually linked instruments.
Contractual terms that introduce exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending
arrangement do not give rise to contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Investments in equity instruments
Equity instruments are classified and measured at FVTPL with gains
and losses reflected in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-567": { "value": "
(j) Financial assets \u2013 Notes 7, 8, 15, 17, 18, 19, 21, 25 and 42
Recognition and initial measurement
The Group initially recognises financial assets on the trade date, being
the date on which the Group commits to purchase the assets. Loan
assets are recognised when cash is advanced to borrowers. In a
situation where the Group commits to purchase financial assets under
a contract which is not considered a regular-way transaction, the assets
to be acquired are not recognised until the acquisition contract is
settled. In this case, the contract to acquire the financial asset is a
derivative that is measured at FVTPL in the period between the trade
date and the settlement date.
Financial assets measured at amortised cost or at fair value through
other comprehensive income (\u2018FVOCI\u2019) are recognised initially at fair
value adjusted for direct and incremental transaction costs. Financial
assets measured at fair value through profit or loss (\u2018FVTPL\u2019) are
recognised initially at fair value and transaction costs are taken directly
to the income statement.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into. The best evidence of the fair value of
a derivative at initial recognition is the transaction price (i.e. the fair value
of the consideration given or received) unless the fair value of that
instrument is evidenced by comparison with other observable current
market transactions in the same instrument (i.e. without modification or
repackaging) or based on a valuation technique whose variables include
only data from observable markets. Profits or losses are only recognised
on the initial recognition of derivatives when there are observable current
market transactions or valuation techniques that are based on
observable market inputs.
1\u00a0 Accounting policies continued
(j) Financial assets continued
Classification and subsequent measurement
On initial recognition, a financial asset is classified and subsequently
measured at amortised cost, FVOCI or FVTPL.
The classification and subsequent measurement of financial assets
depend on:
\u2022 The Group\u2019s business model for managing the asset; and
\u2022 The cash flow characteristics of the asset (for assets in a
\u2018hold\u2011to\u2011collect\u2019 or \u2018hold-to-collect-and-sell\u2019 business model).
Based on these factors, the Group classifies its financial assets into
one of the following categories:
\u2013 Amortised cost
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect\u2019 business model whose objective is to hold assets to
collect contractual cash flows; and whose contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest (\u2018SPPI\u2019). The carrying amount of these assets is calculated
using the effective interest rate method and is adjusted on each
measurement date by the expected credit loss allowance for each
asset, with movements recognised in profit or loss.
\u2013 Fair value through other comprehensive income (\u2018FVOCI\u2019)
Assets that have not been designated as at FVTPL, and are held within
a \u2018hold-to-collect-and-sell\u2019 business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets;
and whose contractual terms give rise on specified dates to cash flows
that are SPPI. Movements in the carrying amount of these assets are
taken through other comprehensive income (\u2018OCI\u2019), except for the
recognition of credit impairment gains or losses, interest revenue or
foreign exchange gains and losses, which are recognised in profit or
loss. When a financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to profit or
loss other than in the case of equity instruments designated at\u00a0FVOCI.
\u2013 Fair value through profit or loss (\u2018FVTPL\u2019)
Financial assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVTPL. Gains or losses (excluding interest
income or expense) on such assets are recognised in profit or loss on
an ongoing basis.
In addition, the Group may irrevocably designate a financial asset as at
FVTPL that otherwise meets the requirements to be measured at
amortised cost or at FVOCI if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Business model assessment
The Group makes an assessment of the objective of the business
model at a portfolio level, as this reflects how portfolios of assets are
managed to achieve a particular objective, rather than management\u2019s
intentions for individual assets.
The assessment considers the following:
\u2022 The strategy for the portfolio as communicated by management;
\u2022 How the performance of the portfolio is evaluated and reported to
senior management;
\u2022 The risks that impact the performance of the business model, and
how those risks are managed;
\u2022 How managers of the business are compensated (i.e. based on fair
value of assets managed or on the contractual cash flows collected);
and
\u2022 The frequency, value and timing of sales in prior periods, reasons for
those sales, and expectations of future sales activity.
Financial assets that are held for trading or managed within a business
model that is evaluated on a fair value basis are measured at FVTPL
because the business objective is neither hold-to-collect contractual
cash flows nor hold-to-collect-and-sell contractual cash flows.
Characteristics of the contractual cash flows
An assessment (\u2018SPPI test\u2019) is performed on all financial assets at
origination that are held within a \u2018hold-to-collect\u2019 or \u2018hold-to-collect-and-
sell\u2019 business model to determine whether the contractual terms of the
financial assets give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal outstanding.
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair
value of the financial asset at initial recognition. \u2018Interest\u2019 is defined as
consideration for the time value of money, for the credit risk associated
with the principal amount outstanding, for other basic lending risks and
costs (i.e. liquidity, administrative costs) and profit margin.
The SPPI test requires an assessment of the contractual terms and
conditions to determine whether a financial asset contains any terms
that could modify the timing or amount of contractual cash flows of the
asset, to the extent that they could not be described as solely payments
of principal and interest. In making this assessment, the Group considers:
\u2022 Features that modify the time value of money element of interest
(e.g. tenor of the interest rate does not correspond with the
frequency within which it resets);
\u2022 Terms providing for prepayment and extension;
\u2022 Leverage features;
\u2022 Contingent events that could change the amount and timing of
cash\u00a0flows;
\u2022 Terms that limit the Group\u2019s claim to cash flows from specified
assets; and
\u2022 Contractually linked instruments.
Contractual terms that introduce exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending
arrangement do not give rise to contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Investments in equity instruments
Equity instruments are classified and measured at FVTPL with gains
and losses reflected in profit or loss.
(k) Financial liabilities and equity \u2013 Notes 15, 28, 29, 30, 32, 33 and 42
The Group categorises financial liabilities as at amortised cost or as at
FVTPL.
The Group recognises a financial liability when it becomes party to the
contractual provisions of the contract.
Issued financial instruments or their components are classified as
liabilities where the substance of the contractual arrangement results in
the Group having a present obligation to either deliver cash or another
financial asset to the holder, to exchange financial instruments on terms
that are potentially unfavourable or to satisfy the obligation otherwise
than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of equity shares.
Financial liabilities are initially recognised at fair value, being their issue
proceeds (fair value of consideration received), net of transaction costs
incurred. Financial liabilities are subsequently measured at amortised
cost, with any difference between the proceeds net of transaction costs
and the redemption value recognised in the income statement using the
effective interest rate method.
1\u00a0 Accounting policies continued
(k) Financial liabilities and equity continued
Where financial liabilities are classified as trading they are also initially
recognised at fair value with the related transaction costs taken directly
to the income statement. Gains and losses arising from subsequent
changes in fair value are recognised directly in the income statement
within net trading income.
Issued financial instruments are classified as equity when the Group
has no contractual obligation to transfer cash, or other financial assets
or to issue a variable number of its own equity instruments. Incremental
costs directly attributable to the issue of equity instruments are shown
as a deduction from the proceeds of issue, net of tax.
On the extinguishment of equity instruments, gains or losses arising are
recognised net of tax directly in the statement of changes in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-569": { "value": "
\u2013 Fair value through profit or loss (\u2018FVTPL\u2019)
Financial assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVTPL. Gains or losses (excluding interest
income or expense) on such assets are recognised in profit or loss on
an ongoing basis.
In addition, the Group may irrevocably designate a financial asset as at
FVTPL that otherwise meets the requirements to be measured at
amortised cost or at FVOCI if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-570": { "value": "
(k) Financial liabilities and equity \u2013 Notes 15, 28, 29, 30, 32, 33 and 42
The Group categorises financial liabilities as at amortised cost or as at
FVTPL.
The Group recognises a financial liability when it becomes party to the
contractual provisions of the contract.
Issued financial instruments or their components are classified as
liabilities where the substance of the contractual arrangement results in
the Group having a present obligation to either deliver cash or another
financial asset to the holder, to exchange financial instruments on terms
that are potentially unfavourable or to satisfy the obligation otherwise
than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of equity shares.
Financial liabilities are initially recognised at fair value, being their issue
proceeds (fair value of consideration received), net of transaction costs
incurred. Financial liabilities are subsequently measured at amortised
cost, with any difference between the proceeds net of transaction costs
and the redemption value recognised in the income statement using the
effective interest rate method.
1\u00a0 Accounting policies continued
(k) Financial liabilities and equity continued
Where financial liabilities are classified as trading they are also initially
recognised at fair value with the related transaction costs taken directly
to the income statement. Gains and losses arising from subsequent
changes in fair value are recognised directly in the income statement
within net trading income.
Issued financial instruments are classified as equity when the Group
has no contractual obligation to transfer cash, or other financial assets
or to issue a variable number of its own equity instruments. Incremental
costs directly attributable to the issue of equity instruments are shown
as a deduction from the proceeds of issue, net of tax.
On the extinguishment of equity instruments, gains or losses arising are
recognised net of tax directly in the statement of changes in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-571": { "value": "
(l) Leases \u2013 Notes 24 and 31
The Group applies a single recognition and measurement approach for
all leases, except for short-term leases of 12 months or less or leases of
low-value assets (i.e. the value of the underlying asset, when new, is
less than \u20ac 5,000/\u00a3 5,000). The Group recognises lease liabilities that
represent the present value of lease payments to be made over the
lease term and right-of-use assets representing the right to use the
underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of
the lease (i.e., the date the underlying asset is available for use). Right-
of-use assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis
over the lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease
liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments (less
any lease incentives receivable), variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group
and payments of penalties for terminating the lease, if the lease term
reflects exercising the option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised as expenses in the
period in which the event or condition that triggers the payment occurs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-572": { "value": "
(m) Determination of fair value of financial instruments \u2013 Note 43
The fair value of a financial instrument is the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in
the principal market, or in its absence, the most advantageous market
to which the Group has access at that date. The Group considers the
impact of non-performance risk when valuing its financial liabilities.
Financial instruments are initially recognised at fair value and, with the
exception of financial assets at fair value through profit or loss, the
initial carrying amount is adjusted for direct and incremental transaction
costs. In the normal course of business, the fair value on initial
recognition is the transaction price (fair value of consideration given or
received). If the Group determines that the fair value at initial
recognition differs from the transaction price and the fair value is
determined by a quoted price in an active market for the same financial
instrument, or by a valuation technique which uses only observable
market inputs, the difference between the fair value at initial recognition
and the transaction price is recognised as a gain or loss. If the fair
value is calculated by a valuation technique that features significant
market inputs that are not observable, the difference between the fair
value at initial recognition and the transaction price is deferred.
Subsequently, the difference is recognised in the income statement on
an appropriate basis over the life of the financial instrument, but no
later than when the valuation is supported by wholly observable inputs;
the transaction matures; or is closed\u00a0out.
Subsequent to initial recognition, the methods used to determine the
fair value of financial instruments include quoted prices in active
markets where those prices are considered to represent actual and
regularly occurring market transactions. Where quoted prices are not
available or are unreliable because of market inactivity, fair values are
determined using valuation techniques.
Quoted prices in active markets
Quoted market prices are used where those prices are considered to
represent actual and regularly occurring market transactions for
financial instruments in active markets.
Valuations for negotiable instruments such as debt and equity securities
are determined using bid prices for asset positions and ask prices for
liability positions.
Where securities are traded on an exchange, the fair value is based on
prices from the exchange. The market for debt securities largely
operates on an \u2018over-the-counter\u2019 basis which means that there is not
an official clearing or exchange price for these security instruments.
Therefore, market makers and/or investment banks (\u2018contributors\u2019)
publish bid and ask levels which reflect an indicative price that they are
prepared to buy and sell a\u00a0particular security. The Group\u2019s valuation
policy requires that the prices used in determining the fair value of
securities quoted in active markets must be sourced from established
market makers and/or investment banks.
Valuation techniques
In the absence of quoted market prices, and in the case of over-the-
counter derivatives, fair value is calculated using valuation techniques.
These valuation techniques maximise the use of relevant observable
inputs and minimise the use of unobservable inputs. The valuation
techniques used incorporate the factors that market participants would
take into account in pricing a transaction. Valuation techniques include
the use of recent orderly transactions between market participants,
reference to other similar instruments, option pricing models,
discounted cash flow analysis and other valuation techniques
commonly used by market participants.
Fair value may be estimated using quoted market prices for similar
instruments, adjusted for differences between the quoted instrument
and the instrument being valued. Where the fair value is calculated
using discounted cash flow analysis, the methodology is to use, to the
greatest extent possible, market data that is either directly observable
or is implied from instrument prices, such as interest rate yield curves,
equities and commodities prices, credit spreads, option volatilities and
currency rates. In addition, the Group considers the impact of own
credit risk and counterparty risk when valuing its derivative liabilities.
1\u00a0 Accounting policies continued
(m) Determination of fair value of financial instruments continued
The valuation methodology is to calculate the expected cash flows
under the terms of each specific contract and then discount these
values back to a present value. The assumptions involved in these
valuation techniques include:
\u2022 The likelihood and expected timing of future cash flows of the
instrument. These cash flows are generally governed by the terms of
the instrument, although management judgement may be required
when the ability of the counterparty to service the instrument in
accordance with the contractual terms is in doubt. In addition, future
cash flows may also be sensitive to the occurrence of future events,
including changes in market rates; and
\u2022 Selecting an appropriate discount rate for the instrument, based on
the interest rate yield curves including the determination of an
appropriate spread for the instrument over the risk-free rate. The
spread is adjusted to take into account the specific credit risk profile
of the exposure.
All adjustments in the calculation of the present value of future cash
flows are based on factors market participants would take into account
in pricing the financial instrument. Certain financial instruments
(both\u00a0assets and liabilities) may be valued on the basis of valuation
techniques that feature one or more significant market inputs that are
not observable. When applying a valuation technique with
unobservable data, estimates are made to reflect uncertainties in fair
values resulting from a lack of market data, for example, as a result of
illiquidity in the market. For these instruments, the fair value
measurement is less reliable. Inputs into valuations based on non-
observable data are inherently uncertain because there is little or no
current market data available from which to determine the price at
which an orderly transaction between market participants would occur
under current market conditions. However, in most cases there is some
market data available on which to base a determination of fair value, for
example historical data, and the fair values of most financial
instruments will be based on some market observable inputs even
where the non-observable inputs are significant. All unobservable
inputs used in valuation techniques reflect the assumptions market
participants would use when fair valuing the financial instrument.
The Group tests the outputs of the valuation model to ensure that it
reflects current market conditions. The calculation of fair value for any
financial instrument may require adjustment of the quoted price or the
valuation technique output to reflect the cost of credit risk and the
liquidity of the market, if market participants would include one, where
these are not embedded in underlying valuation techniques or prices
used.The choice of contributors, the quality of market data used for
pricing and the valuation techniques used are all subject to internal
review and approval procedures.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-573": { "value": "If the Group determines that the fair value at initial
recognition differs from the transaction price and the fair value is
determined by a quoted price in an active market for the same financial
instrument, or by a valuation technique which uses only observable
market inputs, the difference between the fair value at initial recognition
and the transaction price is recognised as a gain or loss. If the fair
value is calculated by a valuation technique that features significant
market inputs that are not observable, the difference between the fair
value at initial recognition and the transaction price is deferred.
Subsequently, the difference is recognised in the income statement on
an appropriate basis over the life of the financial instrument, but no
later than when the valuation is supported by wholly observable inputs;
the transaction matures; or is closed\u00a0out.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognisingDifferenceBetweenFairValueAtInitialRecognitionAndAmountDeterminedUsingValuationTechniqueExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-574": { "value": "
(n) Sale and repurchase agreements (including securities
borrowing and lending) \u2013 Notes 19 and 41
Financial assets may be lent or sold subject to a commitment to
repurchase them (\u2018repos\u2019). Such securities are retained on the
statement of financial position when substantially all the risks and
rewards of ownership remain with the Group. The liability to the
counterparty is included separately on the statement of financial
position. Similarly, when securities are purchased subject to a
commitment to resell (\u2018reverse repos\u2019), or where the Group borrows
securities, but does not acquire the risks and rewards of ownership,
the\u00a0transactions are treated as collateralised loans, and the securities
are not usually included in the statement of financial position. The
exception to this is where these are sold to third parties, at which point
the obligation to repurchase the securities is recorded as a trading
liability at fair value and any subsequent gain or loss included in trading
income. The\u00a0difference between the sale and repurchase price is
accrued over the life of the agreements using the effective interest rate
method. Securities lent to counterparties are also retained in the
financial statements.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-576": { "value": "
(o) Derivatives and hedge accounting \u2013 Note 16
Derivatives, such as interest rate swaps, options and forward rate
agreements, futures, currency swaps and options, credit and equity
derivatives are used for trading purposes whereas interest rate swaps,
currency swaps, cross currency interest rate swaps and credit
derivatives are used for hedge accounting purposes.
The Group maintains trading positions in a variety of financial
instruments including derivatives. Trading transactions arise both as a
result of activity generated by customers and from proprietary trading
with a view to generating incremental income.
Non-trading derivative transactions comprise transactions held for
hedging purposes as part of the Group\u2019s risk management strategy
against assets, liabilities, positions and cash flows.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into and subsequently remeasured at fair
value. Fair values are obtained from quoted market prices in active
markets, including recent market transactions, and from valuation
techniques using discounted cash flow models and option pricing
models as appropriate. Derivatives are included in assets when their
fair value is positive, and in liabilities when their fair value is negative,
unless there is the legal ability and intention to settle an asset and
liability on a net basis.
The best evidence of the fair value of a derivative at initial recognition is
the transaction price (i.e. the fair value of the consideration given or
received) unless the fair value of that instrument is evidenced by
comparison with other observable current market transactions in the
same instrument (i.e. without modification or repackaging) or based on
a valuation technique whose variables include only data from
observable markets.
Profits or losses are only recognised on initial recognition of derivatives
when there are observable current market transactions or valuation
techniques that are based on observable market inputs.
Hedging
The Group avails of the hedge accounting requirements of IAS 39
Financial Instruments: Recognition and Measurement ('IAS 39') as
adopted by the EU, until portfolio hedge accounting is addressed by the
IASB, as permitted as an accounting policy choice under IFRS 9.
All derivatives are carried at fair value and the accounting treatment of
the resulting fair value gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item
being hedged. Where derivatives are held for risk management
purposes, and where transactions meet the criteria specified in IAS 39,
the Group designates certain derivatives as either:
\u2022 Hedges of the fair value of recognised assets or liabilities or firm
commitments (\u2018fair value hedge\u2019); or
\u2022 Hedges of the exposure to variability of cash flows attributable to a
recognised asset or liability, or a highly probable forecasted
Transaction (\u2018cash flow hedge\u2019); or
\u2022 Hedges of a net investment in a foreign operation.
1\u00a0 Accounting policies continued
(o) Derivatives and hedge accounting continued
When a financial instrument is designated as a hedge, the Group
formally documents the relationship between the hedging instrument
and hedged item as well as its risk management objectives and its
strategy for undertaking the various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or
cash flows of the hedged items.
The Group discontinues hedge accounting when:
(a) it is determined that a derivative is not, or has ceased to be, highly
effective as a hedge;
(b) the derivative expires, or is sold, terminated, or exercised;
(c) the hedged item matures or is sold or repaid; or
(d) a forecast transaction is no longer deemed highly probable.
To the extent that the changes in the fair value of the hedging derivative
differ from changes in the fair value of the hedged risk in the hedged
item, or the cumulative change in the fair value of the hedging derivative
differs from the cumulative change in the fair value of expected future
cash flows of the hedged item, ineffectiveness arises. The amount of
ineffectiveness, taking into account the timing of the expected cash flows
where relevant, provided that it is not so great as to disqualify the entire
hedge for hedge accounting, is recorded in the income statement.
In certain circumstances, the Group may decide to cease hedge
accounting even though the hedge relationship continues to be highly
effective by no longer designating the financial instrument as a hedge.
Fair value hedge accounting
Changes in fair value of derivatives that qualify and are designated as
fair value hedges are recorded in the income statement, together with
changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
For micro fair value hedges, the hedge adjustment is presented as an
adjustment to the carrying amount of the hedged item. For portfolio fair
value hedges, the aggregated fair value changes in the portfolio of
hedged items are recognised in a single separate line item within
liabilities when the hedged portfolio consists of liabilities, or within
assets when the hedged portfolio consists of assets.
If the hedge no longer meets the criteria for hedge accounting, the fair
value hedging adjustment, for items carried at amortised cost, is
amortised to profit or loss using the effective interest rate method over
the remaining maturity of the hedged item for micro hedges, and on a
straight-line basis over the relevant repricing period for macro hedges.
For debt securities measured at FVOCI, the fair value adjustment for
hedged items is recognised in the income statement using the effective
interest rate method.
When a hedged item held at amortised cost that is designated in a
micro fair value hedge or included in the repricing time-period of a
portfolio hedge is derecognised, the unamortised fair value adjustment
is recognised immediately in the income statement.
Cash flow hedge accounting
The Group enters into portfolio cash flow hedges. The effective portion
of changes in the fair value of derivatives that are designated and
qualify as cash flow hedges is initially recognised directly in other
comprehensive income and included in the cash flow hedging reserve
in the statement of changes in equity. The amount recognised in other
comprehensive income is reclassed to profit or loss as a reclassification
adjustment in the same period as the hedged cash flows affect profit or
loss, and in the same line item in the statement of comprehensive
income. Any ineffective portion of the gain or loss on the hedging
instrument is recognised in the income statement immediately.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or
loss recognised in other comprehensive income from the time when the
hedge was effective remains in equity and is reclassified to the income
statement as a reclassification adjustment as the forecast transaction
affects profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was recognised in other
comprehensive income from the period when the hedge was effective is
reclassified to the income statement.
Net investment hedge
Hedges of net investments in foreign operations, including monetary
items that are accounted for as part of the net investment, are
accounted for similarly to cash flow hedges. The effective portion of the
gain or loss on the hedging instrument is recognised in other
comprehensive income and the ineffective portion is recognised
immediately in the income statement. The cumulative gain or loss
previously recognised in other comprehensive income is recognised in
the income statement on the disposal or partial disposal of the foreign
operation. Hedges of net investments may include non-derivative
liabilities as well as derivative financial instruments.
Derivatives that do not qualify for hedge accounting
Certain derivative contracts entered into as economic hedges do not
qualify for hedge accounting and are classified as trading derivatives.
Changes in the fair value of these derivative instruments are recognised
immediately in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-575": { "value": "
(o) Derivatives and hedge accounting \u2013 Note 16
Derivatives, such as interest rate swaps, options and forward rate
agreements, futures, currency swaps and options, credit and equity
derivatives are used for trading purposes whereas interest rate swaps,
currency swaps, cross currency interest rate swaps and credit
derivatives are used for hedge accounting purposes.
The Group maintains trading positions in a variety of financial
instruments including derivatives. Trading transactions arise both as a
result of activity generated by customers and from proprietary trading
with a view to generating incremental income.
Non-trading derivative transactions comprise transactions held for
hedging purposes as part of the Group\u2019s risk management strategy
against assets, liabilities, positions and cash flows.
Derivatives are measured initially at fair value on the date on which the
derivative contract is entered into and subsequently remeasured at fair
value. Fair values are obtained from quoted market prices in active
markets, including recent market transactions, and from valuation
techniques using discounted cash flow models and option pricing
models as appropriate. Derivatives are included in assets when their
fair value is positive, and in liabilities when their fair value is negative,
unless there is the legal ability and intention to settle an asset and
liability on a net basis.
The best evidence of the fair value of a derivative at initial recognition is
the transaction price (i.e. the fair value of the consideration given or
received) unless the fair value of that instrument is evidenced by
comparison with other observable current market transactions in the
same instrument (i.e. without modification or repackaging) or based on
a valuation technique whose variables include only data from
observable markets.
Profits or losses are only recognised on initial recognition of derivatives
when there are observable current market transactions or valuation
techniques that are based on observable market inputs.
Hedging
The Group avails of the hedge accounting requirements of IAS 39
Financial Instruments: Recognition and Measurement ('IAS 39') as
adopted by the EU, until portfolio hedge accounting is addressed by the
IASB, as permitted as an accounting policy choice under IFRS 9.
All derivatives are carried at fair value and the accounting treatment of
the resulting fair value gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item
being hedged. Where derivatives are held for risk management
purposes, and where transactions meet the criteria specified in IAS 39,
the Group designates certain derivatives as either:
\u2022 Hedges of the fair value of recognised assets or liabilities or firm
commitments (\u2018fair value hedge\u2019); or
\u2022 Hedges of the exposure to variability of cash flows attributable to a
recognised asset or liability, or a highly probable forecasted
Transaction (\u2018cash flow hedge\u2019); or
\u2022 Hedges of a net investment in a foreign operation.
1\u00a0 Accounting policies continued
(o) Derivatives and hedge accounting continued
When a financial instrument is designated as a hedge, the Group
formally documents the relationship between the hedging instrument
and hedged item as well as its risk management objectives and its
strategy for undertaking the various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or
cash flows of the hedged items.
The Group discontinues hedge accounting when:
(a) it is determined that a derivative is not, or has ceased to be, highly
effective as a hedge;
(b) the derivative expires, or is sold, terminated, or exercised;
(c) the hedged item matures or is sold or repaid; or
(d) a forecast transaction is no longer deemed highly probable.
To the extent that the changes in the fair value of the hedging derivative
differ from changes in the fair value of the hedged risk in the hedged
item, or the cumulative change in the fair value of the hedging derivative
differs from the cumulative change in the fair value of expected future
cash flows of the hedged item, ineffectiveness arises. The amount of
ineffectiveness, taking into account the timing of the expected cash flows
where relevant, provided that it is not so great as to disqualify the entire
hedge for hedge accounting, is recorded in the income statement.
In certain circumstances, the Group may decide to cease hedge
accounting even though the hedge relationship continues to be highly
effective by no longer designating the financial instrument as a hedge.
Fair value hedge accounting
Changes in fair value of derivatives that qualify and are designated as
fair value hedges are recorded in the income statement, together with
changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
For micro fair value hedges, the hedge adjustment is presented as an
adjustment to the carrying amount of the hedged item. For portfolio fair
value hedges, the aggregated fair value changes in the portfolio of
hedged items are recognised in a single separate line item within
liabilities when the hedged portfolio consists of liabilities, or within
assets when the hedged portfolio consists of assets.
If the hedge no longer meets the criteria for hedge accounting, the fair
value hedging adjustment, for items carried at amortised cost, is
amortised to profit or loss using the effective interest rate method over
the remaining maturity of the hedged item for micro hedges, and on a
straight-line basis over the relevant repricing period for macro hedges.
For debt securities measured at FVOCI, the fair value adjustment for
hedged items is recognised in the income statement using the effective
interest rate method.
When a hedged item held at amortised cost that is designated in a
micro fair value hedge or included in the repricing time-period of a
portfolio hedge is derecognised, the unamortised fair value adjustment
is recognised immediately in the income statement.
Cash flow hedge accounting
The Group enters into portfolio cash flow hedges. The effective portion
of changes in the fair value of derivatives that are designated and
qualify as cash flow hedges is initially recognised directly in other
comprehensive income and included in the cash flow hedging reserve
in the statement of changes in equity. The amount recognised in other
comprehensive income is reclassed to profit or loss as a reclassification
adjustment in the same period as the hedged cash flows affect profit or
loss, and in the same line item in the statement of comprehensive
income. Any ineffective portion of the gain or loss on the hedging
instrument is recognised in the income statement immediately.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or
loss recognised in other comprehensive income from the time when the
hedge was effective remains in equity and is reclassified to the income
statement as a reclassification adjustment as the forecast transaction
affects profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was recognised in other
comprehensive income from the period when the hedge was effective is
reclassified to the income statement.
Net investment hedge
Hedges of net investments in foreign operations, including monetary
items that are accounted for as part of the net investment, are
accounted for similarly to cash flow hedges. The effective portion of the
gain or loss on the hedging instrument is recognised in other
comprehensive income and the ineffective portion is recognised
immediately in the income statement. The cumulative gain or loss
previously recognised in other comprehensive income is recognised in
the income statement on the disposal or partial disposal of the foreign
operation. Hedges of net investments may include non-derivative
liabilities as well as derivative financial instruments.
Derivatives that do not qualify for hedge accounting
Certain derivative contracts entered into as economic hedges do not
qualify for hedge accounting and are classified as trading derivatives.
Changes in the fair value of these derivative instruments are recognised
immediately in the income statement.
Cash flow hedging reserves
Cash flow hedging reserves represent the net gains or losses, net of
tax, on effective cash flow hedging instruments that will be reclassified
to the income statement when the hedged transaction affects profit
or\u00a0loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-577": { "value": "
Hedging
The Group avails of the hedge accounting requirements of IAS 39
Financial Instruments: Recognition and Measurement ('IAS 39') as
adopted by the EU, until portfolio hedge accounting is addressed by the
IASB, as permitted as an accounting policy choice under IFRS 9.
All derivatives are carried at fair value and the accounting treatment of
the resulting fair value gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item
being hedged. Where derivatives are held for risk management
purposes, and where transactions meet the criteria specified in IAS 39,
the Group designates certain derivatives as either:
\u2022 Hedges of the fair value of recognised assets or liabilities or firm
commitments (\u2018fair value hedge\u2019); or
\u2022 Hedges of the exposure to variability of cash flows attributable to a
recognised asset or liability, or a highly probable forecasted
Transaction (\u2018cash flow hedge\u2019); or
\u2022 Hedges of a net investment in a foreign operation.
1\u00a0 Accounting policies continued
(o) Derivatives and hedge accounting continued
When a financial instrument is designated as a hedge, the Group
formally documents the relationship between the hedging instrument
and hedged item as well as its risk management objectives and its
strategy for undertaking the various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or
cash flows of the hedged items.
The Group discontinues hedge accounting when:
(a) it is determined that a derivative is not, or has ceased to be, highly
effective as a hedge;
(b) the derivative expires, or is sold, terminated, or exercised;
(c) the hedged item matures or is sold or repaid; or
(d) a forecast transaction is no longer deemed highly probable.
To the extent that the changes in the fair value of the hedging derivative
differ from changes in the fair value of the hedged risk in the hedged
item, or the cumulative change in the fair value of the hedging derivative
differs from the cumulative change in the fair value of expected future
cash flows of the hedged item, ineffectiveness arises. The amount of
ineffectiveness, taking into account the timing of the expected cash flows
where relevant, provided that it is not so great as to disqualify the entire
hedge for hedge accounting, is recorded in the income statement.
In certain circumstances, the Group may decide to cease hedge
accounting even though the hedge relationship continues to be highly
effective by no longer designating the financial instrument as a hedge.
Fair value hedge accounting
Changes in fair value of derivatives that qualify and are designated as
fair value hedges are recorded in the income statement, together with
changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
For micro fair value hedges, the hedge adjustment is presented as an
adjustment to the carrying amount of the hedged item. For portfolio fair
value hedges, the aggregated fair value changes in the portfolio of
hedged items are recognised in a single separate line item within
liabilities when the hedged portfolio consists of liabilities, or within
assets when the hedged portfolio consists of assets.
If the hedge no longer meets the criteria for hedge accounting, the fair
value hedging adjustment, for items carried at amortised cost, is
amortised to profit or loss using the effective interest rate method over
the remaining maturity of the hedged item for micro hedges, and on a
straight-line basis over the relevant repricing period for macro hedges.
For debt securities measured at FVOCI, the fair value adjustment for
hedged items is recognised in the income statement using the effective
interest rate method.
When a hedged item held at amortised cost that is designated in a
micro fair value hedge or included in the repricing time-period of a
portfolio hedge is derecognised, the unamortised fair value adjustment
is recognised immediately in the income statement.
Cash flow hedge accounting
The Group enters into portfolio cash flow hedges. The effective portion
of changes in the fair value of derivatives that are designated and
qualify as cash flow hedges is initially recognised directly in other
comprehensive income and included in the cash flow hedging reserve
in the statement of changes in equity. The amount recognised in other
comprehensive income is reclassed to profit or loss as a reclassification
adjustment in the same period as the hedged cash flows affect profit or
loss, and in the same line item in the statement of comprehensive
income. Any ineffective portion of the gain or loss on the hedging
instrument is recognised in the income statement immediately.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or
loss recognised in other comprehensive income from the time when the
hedge was effective remains in equity and is reclassified to the income
statement as a reclassification adjustment as the forecast transaction
affects profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was recognised in other
comprehensive income from the period when the hedge was effective is
reclassified to the income statement.
Net investment hedge
Hedges of net investments in foreign operations, including monetary
items that are accounted for as part of the net investment, are
accounted for similarly to cash flow hedges. The effective portion of the
gain or loss on the hedging instrument is recognised in other
comprehensive income and the ineffective portion is recognised
immediately in the income statement. The cumulative gain or loss
previously recognised in other comprehensive income is recognised in
the income statement on the disposal or partial disposal of the foreign
operation. Hedges of net investments may include non-derivative
liabilities as well as derivative financial instruments.
Derivatives that do not qualify for hedge accounting
Certain derivative contracts entered into as economic hedges do not
qualify for hedge accounting and are classified as trading derivatives.
Changes in the fair value of these derivative instruments are recognised
immediately in the income statement.
Cash flow hedging reserves
Cash flow hedging reserves represent the net gains or losses, net of
tax, on effective cash flow hedging instruments that will be reclassified
to the income statement when the hedged transaction affects profit
or\u00a0loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-578": { "value": "
(p) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights
to the cash flows from the financial asset expire or it transfers the rights
to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Group neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset.
On derecognition of a financial asset, the difference between the
carrying amount of the asset and the sum of (i) the consideration
received (including any new asset obtained less any new liability
assumed) and (ii) any cumulative gain or loss that had been recognised
in OCI is recognised in profit or loss. Relevant costs incurred with the
disposal of a financial asset are deducted in computing the gain or loss
on disposal.
Any interest in transferred financial assets that qualify for derecognition,
that is created or retained by the Group, is recognised as a separate asset
or liability.
The Group enters into transactions whereby it transfers assets
recognised on its statement of financial position, but retains either all or
substantially all of the risks and rewards of the transferred assets or a
portion of them. In such cases, the transferred assets are not
derecognised. Examples of such transactions are securities sold under
agreements to repurchase.
In transactions in which the Group neither retains nor transfers
substantially all of the risks and rewards of ownership of a financial
asset and it retains control over the asset, the Group continues to
recognise the asset to the extent of its continuing involvement,
determined by the extent to which it is exposed to changes in the value
of the transferred asset.
In certain transactions, the Group retains the obligation to service the
transferred financial asset for a fee. The transferred asset is
derecognised if it meets the derecognition criteria. An asset or liability is
recognised for the servicing contract if the servicing fee is more than
adequate or is less than adequate for performing the servicing.
1\u00a0 Accounting policies continued
(p) Derecognition continued
The write-off of a financial asset constitutes a derecognition event.
Where a financial asset is partially written-off, and the portion written-off
comprises specifically identified cash flows, this will constitute a
derecognition event for that part written-off.
Financial liabilities
The Group derecognises a financial liability when its contractual
obligations are discharged, cancelled or expired. Any gain or loss on
the extinguishment or remeasurement of a financial liability is
recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-580": { "value": "
(q) Impairment of financial assets \u2013 Notes 11, 20 and 34
The Group recognises loss allowances for expected credit losses at
each balance sheet date for the following financial instruments that are
not measured at FVTPL:
\u2022 Financial assets at amortised cost;
\u2022 Financial assets at FVOCI (except for equity instruments);
\u2022 Lease receivables;
\u2022 Financial guarantee contracts issued; and
\u2022 Loan commitments issued.
Investments in equity instruments are recognised at fair value and
accordingly, expected credit losses (\u2018ECLs\u2019) are not recognised
separately for equity instruments.
ECLs are the weighted average of credit losses. When measuring
ECLs, the Group takes into account:
\u2022 Probability-weighted outcomes;
\u2022 The time value of money so that ECLs are discounted to the
reporting date; and
\u2022 Reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The amount of ECLs recognised as a loss allowance depends on the
extent of credit deterioration since initial recognition. There are two
measurement bases:
\u2022 12-month ECLs (Stage 1), which applies to all items as long as there
is no significant deterioration in credit quality since initial recognition;
and
\u2022 Lifetime ECLs (Stages 2 and 3), which applies when a significant
increase in credit risk has occurred on an individual or collective basis.
The 12 month ECL is the portion of lifetime expected credit losses that
represent the expected credit losses that result from default events on
a\u00a0financial instrument that are possible within the 12 months after the
reporting date. Lifetime ECL is the expected credit losses that result from
all possible default events over the expected life of a financial instrument.
In the case of Stage 2, credit risk on the financial instrument has
increased significantly since initial recognition but the instrument is not
considered credit impaired. For a financial instrument in Stage 3, credit
risk has increased significantly since initial recognition and the
instrument is considered credit impaired.
Financial assets are allocated to stages dependent on credit quality
relative to when the asset was originated.
A financial asset can only originate in either Stage 1 or as purchased or
originated credit impaired (\u2018POCI\u2019). The ECL held against an asset
depends on a number of factors, one of which is its stage allocation. Assets
allocated to Stage 2 and Stage 3 have lifetime ECLs. Collateral and other
credit enhancements are not considered as part of stage allocation.
Collateral is reflected in the Group\u2019s loss given default models (\u2018LGD\u2019).
Purchased or originated credit impaired
POCI financial assets are those that are credit-impaired on initial
recognition. The Group may originate a credit-impaired financial asset
following a substantial modification of a distressed financial asset that
resulted in derecognition of the original financial asset.
POCIs are financial assets originated credit impaired that have a
discount to the contractual value when measured at fair value. The
Group uses an appropriate discount rate for measuring ECL in the case
of POCIs which is the credit-adjusted EIR. This rate is used to discount
the expected cash flows of such assets to fair value on initial recognition.
POCIs remain outside of the normal stage allocation process for the
lifetime of the obligation. The ECL for POCIs is always measured at
an\u00a0amount equal to lifetime expected credit losses. The amount
recognised as a loss allowance for these assets is the cumulative
changes in lifetime expected credit losses since the initial recognition
of\u00a0the assets rather than the total amount of lifetime expected
credit\u00a0losses.
At each reporting date, the Group recognises the amount of the change
in lifetime expected credit losses as a credit impairment gain or loss in
the income statement. Favourable changes in lifetime expected credit
losses are recognised as a credit impairment gain, even if the
favourable changes exceed the amount previously recognised in profit
or loss as a credit impairment loss.
Modification
From time to time, the Group will modify the original terms of a
customer\u2019s loan either as part of the ongoing relationship or arising
from changes in the customer\u2019s circumstances such as when that
customer is unable to make the agreed original contractual
repayments.
A modification refers to either:
\u2022 A change to the previous terms and conditions of a debt contract; or
\u2022 A total or partial refinancing of a debt contract.
Modifications may occur for both customers in distress and for those not
in distress. Any financial asset that undergoes a change or renegotiation
of cash flows and is not derecognised is a modified financial asset.
When modification does not result in derecognition, the modified assets
are treated as the same continuous lending agreement and a
modification gain or loss is taken to profit or loss immediately. The
gross carrying amount of the financial asset is recalculated as the
present value of the renegotiated or modified contractual cash flows
discounted at the financial asset\u2019s original effective interest rate. Any
costs or fees incurred adjust the carrying amount of the modified
financial asset and are amortised over the remaining term of the
modified financial asset.
The stage allocation for modified assets which are not derecognised is\u00a0by
reference to the credit risk at initial recognition of the original, unmodified
contractual terms i.e. the date of initial recognition is not\u00a0reset.
Where renegotiation of the terms of a financial asset leads to
a\u00a0customer granting equity to the Group in exchange for any loan
balance outstanding, the new instrument is recognised at fair value
with\u00a0any difference to the loan carrying amount recognised in the
income statement.
Derecognition occurs if a modification or restructure is substantial on
a\u00a0qualitative or quantitative basis. Accordingly, certain forborne assets
are derecognised. The modified/restructured asset (derecognised
forborne asset (\u2018DFA\u2019)) is considered a \u2018new financial instrument\u2019
and\u00a0the date that the new asset is recognised is the date of initial
recognition from this point forward. DFAs are allocated to Stage 1
on\u00a0origination and follow the normal staging process thereafter.
1\u00a0 Accounting policies continued
(q) Impairment of financial assets continued
If there is evidence of credit impairment at the time of initial recognition
of a DFA, the asset is deemed to be a POCI. POCIs are not allocated
to stages but are assigned a lifetime PD and ECL for the duration of the
obligation\u2019s life. Where the modification/restructure of a non-forborne
credit obligation results in derecognition, the new loan is originated in
Stage 1 and follows the normal staging process thereafter.
Collateralised financial assets \u2013 Repossessions
The ECL calculation for a collateralised financial asset reflects the cash
flows that may result from foreclosure, costs for obtaining and settling
the collateral, and whether or not foreclosure is probable.
For loans that are credit impaired, the Group may repossess collateral
previously pledged as security in order to achieve an orderly realisation
of the loan. The Group will then offer this repossessed collateral for sale.
However, if the Group believes the proceeds of the sale will comprise
only part of the recoverable amount of the loan with the customer
remaining liable for any outstanding balance, the loan continues to be
recognised and\u00a0the repossessed asset is not recognised. However, if
the Group believes that the sale proceeds of the asset will comprise all
or substantially all of the recoverable amount of the loan, the loan is
derecognised and the acquired asset is accounted for in accordance
with the applicable accounting standard. Any further impairment of the
repossessed asset is treated as an impairment of that asset and not as
a credit impairment of\u00a0the original\u00a0loan.
Financial assets at FVOCI
The ECL allowance for financial assets measured at FVOCI does not
reduce the carrying amount in the statement of financial position
because the carrying amount of these assets is fair value. However, an
amount equal to the ECL allowance that would arise if the assets were
measured at amortised cost is recognised in other comprehensive
income (\u2018OCI\u2019) as an accumulated credit impairment amount, with a
corresponding charge to profit or loss. The accumulated loss
recognised in OCI is recycled to the profit or loss upon derecognition of
the assets (together with other accumulated gains and losses in OCI).
Write-offs and debt forgiveness
The Group reduces the gross carrying amount of a financial asset
either partially or fully when there is no reasonable expectation
of\u00a0recovery.
Where there is no formal debt forgiveness agreed with the customer,
the Group may write off a loan either partially or fully when there is no
reasonable expectation of recovery. This is considered a non-
contracted write-off. In this case, the borrower remains fully liable for
the credit obligation and is not advised of the write-off.
Once a financial asset is written-off either partially or fully, the amount
written-off cannot subsequently be recognised on the balance sheet. It
is only when cash is received in relation to the amount written-off that
income is recognised in the income statement as a \u2018recovery of bad
debt previously written-off.
Debt forgiveness arises where there is a formal contract agreed with
the customer for the write-off of a loan.
Impairment of financial assets
The Group\u2019s accounting policy for impairment of financial assets is set
out in accounting policy (q) in note 1. Details of the Group\u2019s net credit
impairment charge are set out in note 11 and ECL allowance on
financial assets are set out in note 20.
The calculation of the ECL allowance is complex and requires the use
of a number of accounting judgements.
The most significant judgements applied by the Group in determining
the ECL allowance are as follows:
\u2022 Determining the criteria for a significant increase in credit risk and
for being classified as credit impaired; and
\u2022 Determining the need for and an appropriate methodology for
post\u2011model adjustments.
The significant management judgement and the governance process,
relating to ECL, are set out on pages 187 to 201 in the Risk
Management section.
2\u00a0 Critical accounting judgements and
estimates continued
mpairment of financial assets
The Group\u2019s accounting policy for impairment of financial assets is set
out in accounting policy (q) in note 1. Details of the Group\u2019s expected
credit loss ('ECL') allowance are set out in note 20.
The key estimates and assumptions that the Group have used in
determining the ECL allowance are as follows:
\u2022 Establishing the number and relative weightings for forward looking
scenarios;
\u2022 Inputs into discounted cash-flows (\u2018DCFs\u2019) for certain stage 3 credit
impaired obligors;
\u2022 The assumptions for measuring ECL (e.g. PD, LGD and EAD and
the parameters to be included within the models for modelled ECL);
and
\u2022 The estimation of post model adjustments where required.
The calculation of the ECL allowance is complex and therefore the
Group must consider large amounts of information in its determination.
This process requires significant use of estimates and assumptions,
some of which by their nature, are highly subjective and very sensitive
to risk factors such as changes to economic conditions. Changes in the
ECL allowance can materially affect net income.
On an ongoing basis, the various estimates and assumptions are
reviewed in light of differences between actual and previously
calculated expected losses. These are then recalibrated and refined to
reflect current and evolving economic conditions. The ECL allowance
is, in turn, reviewed and approved by the Group Credit Committee on a
quarterly basis with final Group levels being approved by the Board
Audit Committee. Further detail on the ECL governance process is set
out on page 187.
The macroeconomic variables used in models to calculate ECL
allowance are based on assumptions, forecasts and estimates
against\u00a0a backdrop of an evolving economic landscape. Accordingly,
developments in local and international factors could have a material
bearing on the ECL allowance within the next financial year. The
Group\u2019s sensitivity to a range of macroeconomic factors under the (i)
base forecast; (ii) upside; and (iii) downside scenarios is set out on
pages 194 to 199 of the Risk Management section of this report.
DCFs are the most significant input to the ECL calculation for Stage 3
credit impaired borrowers where the gross credit exposure is greater
than or equal to \u20ac 1 million for Ireland or greater than or equal to
\u00a3 500,000 for the UK. Collateral valuations and the estimated time to
realisation of collateral is a key component of the DCF model. The DCF
assessment produces a base case ECL which is then adjusted,
considering all relevant and supportable information, including but not
limited to, historical data analysis, predictive modelling and
management judgement, to incorporate the impact of multiple
scenarios on the base ECL.
The Group has developed a standard approach for the measurement of
ECL for the majority of the Group\u2019s exposures where each ECL input
parameter (e.g. PD, LGD and EAD) is developed in line with standard
modelling methodology. These are discussed further on pages 192 to
193 of the Risk Management section. When considering changes in
these assumptions collectively, there is a significant risk of a material
adjustment to the Group\u2019s ECL allowance within the next financial year.
Where the estimate of ECL does not adequately capture all available
forward looking information about the range of possible outcomes, or
where there is a significant degree of uncertainty, management may
consider it appropriate for an adjustment to ECL. These are referred
to\u00a0as post model adjustments and are set out in detail on pages 200
and 201.
2\u00a0 Critical accounting judgements and
estimates continued
Impairment of financial assets continued
The sensitivity of the carrying amounts of the ECL to changes in
assumptions and estimates relating to inputs into DCFs for certain
Stage 3 credit impaired obligors; the assumptions for measuring ECL;
and the estimation of post model adjustments where required have not
been provided given their diverse nature, their interrelationship and the
number of estimates and assumptions involved.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-579": { "value": "
(q) Impairment of financial assets \u2013 Notes 11, 20 and 34
The Group recognises loss allowances for expected credit losses at
each balance sheet date for the following financial instruments that are
not measured at FVTPL:
\u2022 Financial assets at amortised cost;
\u2022 Financial assets at FVOCI (except for equity instruments);
\u2022 Lease receivables;
\u2022 Financial guarantee contracts issued; and
\u2022 Loan commitments issued.
Investments in equity instruments are recognised at fair value and
accordingly, expected credit losses (\u2018ECLs\u2019) are not recognised
separately for equity instruments.
ECLs are the weighted average of credit losses. When measuring
ECLs, the Group takes into account:
\u2022 Probability-weighted outcomes;
\u2022 The time value of money so that ECLs are discounted to the
reporting date; and
\u2022 Reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The amount of ECLs recognised as a loss allowance depends on the
extent of credit deterioration since initial recognition. There are two
measurement bases:
\u2022 12-month ECLs (Stage 1), which applies to all items as long as there
is no significant deterioration in credit quality since initial recognition;
and
\u2022 Lifetime ECLs (Stages 2 and 3), which applies when a significant
increase in credit risk has occurred on an individual or collective basis.
The 12 month ECL is the portion of lifetime expected credit losses that
represent the expected credit losses that result from default events on
a\u00a0financial instrument that are possible within the 12 months after the
reporting date. Lifetime ECL is the expected credit losses that result from
all possible default events over the expected life of a financial instrument.
In the case of Stage 2, credit risk on the financial instrument has
increased significantly since initial recognition but the instrument is not
considered credit impaired. For a financial instrument in Stage 3, credit
risk has increased significantly since initial recognition and the
instrument is considered credit impaired.
Financial assets are allocated to stages dependent on credit quality
relative to when the asset was originated.
A financial asset can only originate in either Stage 1 or as purchased or
originated credit impaired (\u2018POCI\u2019). The ECL held against an asset
depends on a number of factors, one of which is its stage allocation. Assets
allocated to Stage 2 and Stage 3 have lifetime ECLs. Collateral and other
credit enhancements are not considered as part of stage allocation.
Collateral is reflected in the Group\u2019s loss given default models (\u2018LGD\u2019).
Purchased or originated credit impaired
POCI financial assets are those that are credit-impaired on initial
recognition. The Group may originate a credit-impaired financial asset
following a substantial modification of a distressed financial asset that
resulted in derecognition of the original financial asset.
POCIs are financial assets originated credit impaired that have a
discount to the contractual value when measured at fair value. The
Group uses an appropriate discount rate for measuring ECL in the case
of POCIs which is the credit-adjusted EIR. This rate is used to discount
the expected cash flows of such assets to fair value on initial recognition.
POCIs remain outside of the normal stage allocation process for the
lifetime of the obligation. The ECL for POCIs is always measured at
an\u00a0amount equal to lifetime expected credit losses. The amount
recognised as a loss allowance for these assets is the cumulative
changes in lifetime expected credit losses since the initial recognition
of\u00a0the assets rather than the total amount of lifetime expected
credit\u00a0losses.
At each reporting date, the Group recognises the amount of the change
in lifetime expected credit losses as a credit impairment gain or loss in
the income statement. Favourable changes in lifetime expected credit
losses are recognised as a credit impairment gain, even if the
favourable changes exceed the amount previously recognised in profit
or loss as a credit impairment loss.
Modification
From time to time, the Group will modify the original terms of a
customer\u2019s loan either as part of the ongoing relationship or arising
from changes in the customer\u2019s circumstances such as when that
customer is unable to make the agreed original contractual
repayments.
A modification refers to either:
\u2022 A change to the previous terms and conditions of a debt contract; or
\u2022 A total or partial refinancing of a debt contract.
Modifications may occur for both customers in distress and for those not
in distress. Any financial asset that undergoes a change or renegotiation
of cash flows and is not derecognised is a modified financial asset.
When modification does not result in derecognition, the modified assets
are treated as the same continuous lending agreement and a
modification gain or loss is taken to profit or loss immediately. The
gross carrying amount of the financial asset is recalculated as the
present value of the renegotiated or modified contractual cash flows
discounted at the financial asset\u2019s original effective interest rate. Any
costs or fees incurred adjust the carrying amount of the modified
financial asset and are amortised over the remaining term of the
modified financial asset.
The stage allocation for modified assets which are not derecognised is\u00a0by
reference to the credit risk at initial recognition of the original, unmodified
contractual terms i.e. the date of initial recognition is not\u00a0reset.
Where renegotiation of the terms of a financial asset leads to
a\u00a0customer granting equity to the Group in exchange for any loan
balance outstanding, the new instrument is recognised at fair value
with\u00a0any difference to the loan carrying amount recognised in the
income statement.
Derecognition occurs if a modification or restructure is substantial on
a\u00a0qualitative or quantitative basis. Accordingly, certain forborne assets
are derecognised. The modified/restructured asset (derecognised
forborne asset (\u2018DFA\u2019)) is considered a \u2018new financial instrument\u2019
and\u00a0the date that the new asset is recognised is the date of initial
recognition from this point forward. DFAs are allocated to Stage 1
on\u00a0origination and follow the normal staging process thereafter.
1\u00a0 Accounting policies continued
(q) Impairment of financial assets continued
If there is evidence of credit impairment at the time of initial recognition
of a DFA, the asset is deemed to be a POCI. POCIs are not allocated
to stages but are assigned a lifetime PD and ECL for the duration of the
obligation\u2019s life. Where the modification/restructure of a non-forborne
credit obligation results in derecognition, the new loan is originated in
Stage 1 and follows the normal staging process thereafter.
Collateralised financial assets \u2013 Repossessions
The ECL calculation for a collateralised financial asset reflects the cash
flows that may result from foreclosure, costs for obtaining and settling
the collateral, and whether or not foreclosure is probable.
For loans that are credit impaired, the Group may repossess collateral
previously pledged as security in order to achieve an orderly realisation
of the loan. The Group will then offer this repossessed collateral for sale.
However, if the Group believes the proceeds of the sale will comprise
only part of the recoverable amount of the loan with the customer
remaining liable for any outstanding balance, the loan continues to be
recognised and\u00a0the repossessed asset is not recognised. However, if
the Group believes that the sale proceeds of the asset will comprise all
or substantially all of the recoverable amount of the loan, the loan is
derecognised and the acquired asset is accounted for in accordance
with the applicable accounting standard. Any further impairment of the
repossessed asset is treated as an impairment of that asset and not as
a credit impairment of\u00a0the original\u00a0loan.
Financial assets at FVOCI
The ECL allowance for financial assets measured at FVOCI does not
reduce the carrying amount in the statement of financial position
because the carrying amount of these assets is fair value. However, an
amount equal to the ECL allowance that would arise if the assets were
measured at amortised cost is recognised in other comprehensive
income (\u2018OCI\u2019) as an accumulated credit impairment amount, with a
corresponding charge to profit or loss. The accumulated loss
recognised in OCI is recycled to the profit or loss upon derecognition of
the assets (together with other accumulated gains and losses in OCI).
Write-offs and debt forgiveness
The Group reduces the gross carrying amount of a financial asset
either partially or fully when there is no reasonable expectation
of\u00a0recovery.
Where there is no formal debt forgiveness agreed with the customer,
the Group may write off a loan either partially or fully when there is no
reasonable expectation of recovery. This is considered a non-
contracted write-off. In this case, the borrower remains fully liable for
the credit obligation and is not advised of the write-off.
Once a financial asset is written-off either partially or fully, the amount
written-off cannot subsequently be recognised on the balance sheet. It
is only when cash is received in relation to the amount written-off that
income is recognised in the income statement as a \u2018recovery of bad
debt previously written-off.
Debt forgiveness arises where there is a formal contract agreed with
the customer for the write-off of a loan.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-581": { "value": "
(r) Collateral and netting
The Group enters into master netting agreements with counterparties,
to ensure that if an event of default occurs, all amounts outstanding
with those counterparties will be settled on a net basis.
Collateral
The Group obtains collateral in respect of customer advances where
this is considered appropriate. The collateral normally takes the form of
a lien over the customer\u2019s assets and gives the Group a claim on these
assets for both existing and future customer liabilities. The collateral is,
in general, not recorded on the statement of financial position.
The Group also receives collateral in the form of cash or securities in
respect of other credit instruments, such as securities borrowing contracts
and derivative contracts in order to reduce credit risk. Collateral received in
the form of securities is not recorded on the statement of financial position.
Collateral received in the form of cash is recorded on the statement of
financial position with a corresponding liability. Therefore, in the case of
cash collateral, these amounts are assigned to deposits received from
banks or other counterparties. Any interest payable or receivable arising is
recorded as interest expense or interest income respectively.
In certain circumstances, the Group will pledge collateral in respect of
its own liabilities or borrowings. Collateral pledged in the form of
securities or loans and advances continues to be recorded on the
statement of financial position. Collateral paid away in the form of cash
is recorded in loans and advances to banks or customers. Any interest
payable or receivable arising is recorded as interest expense or interest
income respectively.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-582": { "value": "
Netting
Financial assets and financial liabilities are offset and the net amount
reported on the statement of financial position if, and only if, there is a
currently enforceable legal right to set off the recognised amounts and
there is an intention to settle on a net basis, or to realise the asset and
settle the liability simultaneously. This is not generally the case with
master netting agreements, therefore, the related assets and liabilities
are presented gross on the statement of financial position.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-583": { "value": "
(s) Financial guarantees and loan commitment contracts \u2013 Note 39
Financial guarantees provided by the Group
Financial guarantees are given to banks, financial institutions and other
bodies on behalf of customers to secure loans, overdrafts and other
banking facilities (\u2018facility guarantees\u2019) and to other parties in
connection with the performance of customers under obligations
relating to contracts, advance payments made by other parties,
tenders, retentions and the payment of import duties. In its normal
course of business, Allied Irish Banks, p.l.c. (the principal operating
company) may issue financial guarantees to other Group entities.
A loan commitment is a contract with a borrower to provide a loan or
credit on specified terms at a future date. The contract may or may not
be cancelled unconditionally at any time without notice depending on
the terms of the contract.
The origination date for financial guarantees and loan commitment
contracts is the date when the contracts become irrevocable. The credit
risk at this date is used to determine if a significant increase in credit
risk has subsequently occurred.
Financial guarantees and loan commitments are initially recognised
in\u00a0the financial statements at fair value on the date that the guarantee
is\u00a0given. Subsequent to initial recognition, the Group applies the
impairment provisions of IFRS 9 and calculates an ECL allowance for
financial guarantees and loan commitment contracts (i.e. those that are
not measured at FVTPL).\u00a0
The ECL allowance calculated on financial guarantees and loan
commitment contracts is reported within Provisions for liabilities
and\u00a0commitments.
1\u00a0 Accounting policies continued
(s) Financial guarantees and loan commitment contracts
continued
Financial guarantees purchased by the Group
The Group enters into financial guarantee contracts which require the
counter-party to the contract to reimburse the Group for a loss it incurs
when the credit risk of the borrower significantly deteriorates. The
Group enters into financial guarantee contracts which require the
counter-party to the contract to reimburse the Group for a loss it incurs
when the credit risk of the borrower significantly deteriorates. This is
settled periodically by reducing the liability associated with the credit
linked notes.The reimbursement asset is settled periodically by
reducing the liability associated with the credit linked notes.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-585": { "value": "
(t) Property, plant and equipment \u2013 Note 24
Property, plant and equipment are stated at cost, or deemed cost,
less\u00a0accumulated depreciation and provisions for impairment, if any.
Additions and subsequent expenditures are capitalised only to the
extent that they enhance the future economic benefits expected to be
derived from the asset. No depreciation is provided on freehold land.
Property, plant and equipment are depreciated on a straight line basis
over their estimated useful economic lives. Depreciation is calculated
based on the gross carrying amount, less the estimated residual value
at the end of the assets\u2019 economic lives.
The Group uses the following useful lives when calculating depreciation:
Asset type
Useful life
Freehold buildings and long-leasehold
property
50 years
Short leasehold property
life of lease, up to 50 years
Costs of adaptation of freehold and
leasehold property
Branch properties
up to 10 years1
Office properties
up to 15 years1
Computers and similar equipment
3 \u2013 7 years
Fixtures and fittings and other equipment
5 \u2013 10 years
1. Subject to the maximum remaining life of the lease.
The Group depreciates right-of-use assets arising under lease
obligations from the commencement date of a lease to the earlier of the
end of the useful life of the right-of-use asset and the end of the lease
term on a straight line basis.
The Group reviews its depreciation rates, at least annually, to take
account of any change in circumstances. When deciding on useful lives
and methods, the principal factors that the Group takes into account
are the expected rate of technological developments and expected
market requirements for, and the expected pattern of usage of, the
assets. When reviewing residual values, the Group estimates the
amount that it would currently obtain for the disposal of the asset, after
deducting the estimated cost of disposal if the asset was already of the
age and condition expected at the end of its useful life.
Gains and losses on disposal of property, plant and equipment are
included in the income statement. It is Group policy not to revalue its
property, plant and equipment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-584": { "value": "
(t) Property, plant and equipment \u2013 Note 24
Property, plant and equipment are stated at cost, or deemed cost,
less\u00a0accumulated depreciation and provisions for impairment, if any.
Additions and subsequent expenditures are capitalised only to the
extent that they enhance the future economic benefits expected to be
derived from the asset. No depreciation is provided on freehold land.
Property, plant and equipment are depreciated on a straight line basis
over their estimated useful economic lives. Depreciation is calculated
based on the gross carrying amount, less the estimated residual value
at the end of the assets\u2019 economic lives.
The Group uses the following useful lives when calculating depreciation:
Asset type
Useful life
Freehold buildings and long-leasehold
property
50 years
Short leasehold property
life of lease, up to 50 years
Costs of adaptation of freehold and
leasehold property
Branch properties
up to 10 years1
Office properties
up to 15 years1
Computers and similar equipment
3 \u2013 7 years
Fixtures and fittings and other equipment
5 \u2013 10 years
1. Subject to the maximum remaining life of the lease.
The Group depreciates right-of-use assets arising under lease
obligations from the commencement date of a lease to the earlier of the
end of the useful life of the right-of-use asset and the end of the lease
term on a straight line basis.
The Group reviews its depreciation rates, at least annually, to take
account of any change in circumstances. When deciding on useful lives
and methods, the principal factors that the Group takes into account
are the expected rate of technological developments and expected
market requirements for, and the expected pattern of usage of, the
assets. When reviewing residual values, the Group estimates the
amount that it would currently obtain for the disposal of the asset, after
deducting the estimated cost of disposal if the asset was already of the
age and condition expected at the end of its useful life.
Gains and losses on disposal of property, plant and equipment are
included in the income statement. It is Group policy not to revalue its
property, plant and equipment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-586": { "value": "
(u) Intangible assets \u2013 Note 23
Computer software and other intangible assets
Computer software and other intangible assets are stated at cost,
less\u00a0amortisation on a straight line basis and provisions for impairment,
if any. The identifiable and directly associated external and internal
costs of acquiring and developing software are capitalised where the
software is controlled by the Group, and where it is probable that future
economic benefits that exceed its cost will flow from its use over more
than one year. Costs associated with maintaining software are
recognised as an expense when incurred. Capitalised computer
software is amortised over 3 to 9 years. Other intangible assets are
amortised over the life of the asset. Computer software and other
intangible assets are reviewed for impairment when there is an
indication that the asset may be impaired. Intangible assets not yet
available for use are reviewed for impairment on an annual\u00a0basis.
Acquired intangible assets
Customer related intangible assets and brands acquired in a business
combination are recognised at fair value at acquisition date.
Customer related intangible assets and brands have a finite useful life
and are carried at cost less accumulated amortisation and provision for
impairment, if any. Amortisation is calculated using the straight line
basis to allocate the cost over their estimated useful life (6 years).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-587": { "value": "
(v) Non-credit risk provisions \u2013 Note 34
Provisions are recognised for present legal or constructive obligations
arising as consequences of past events where it is probable that a
transfer of economic benefit will be necessary to settle the obligation,
and it can be reliably estimated.
When the effect is material, provisions are determined by discounting
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the
risks specific to the liability. Payments are deducted from the present
value of the provision, and interest at the relevant discount rate is
charged annually to interest expense using the effective interest rate
method. These are reported within \u2018provisions for liabilities and
commitments\u2019 in the statement of financial position.
Provisions for liabilities and commitments
The Group\u2019s accounting policy for provisions for liabilities and
commitments is set out in accounting policy (v) in note 1. Details of the
Group\u2019s provisions for liabilities and commitments are shown in note
34.
Significant management judgement is required to determine whether
the Group has a present obligation as a result of a past event and
whether it is probable that an outflow of resources will be required to
settle the obligation.
The Group recognises liabilities where it has present legal or
constructive obligations as a result of past events and it is more likely
than not that these obligations will result in an outflow of resources
to\u00a0settle the obligations and the amount can be reliably estimated.
Judgement is required in determining whether the Group has a present
obligation and whether it is probable that an outflow of economic benefits
will be required to settle this obligation. This judgement is applied to
information available at the time of determining the provision including,
but not limited to, judgements around interpretations of legislation,
regulations and case law depending on the nature of the\u00a0provision.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-588": { "value": "
Share capital
Share capital represents funds raised by issuing shares in return for
cash or other consideration. Share capital comprises ordinary shares of
the entity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-589": { "value": "
Dividends and distributions
Final dividends on ordinary shares are recognised as a liability in the
Group\u2019s financial statements in the period in which they are approved
by the shareholders of the Company. Proposed dividends that are
declared after the end of the reporting date are not recognised as a
liability, they are disclosed in note 50.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-591": { "value": "
(x) Cash and cash equivalents \u2013 Notes 44 and 45
For the purposes of the cash flow statement, cash comprises cash
on\u00a0hand and demand deposits, and cash equivalents comprise highly
liquid investments that are convertible into cash with an insignificant
risk of changes in value and with a maturity of less than three months
from the date of acquisition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-590": { "value": "
(x) Cash and cash equivalents \u2013 Notes 44 and 45
For the purposes of the cash flow statement, cash comprises cash
on\u00a0hand and demand deposits, and cash equivalents comprise highly
liquid investments that are convertible into cash with an insignificant
risk of changes in value and with a maturity of less than three months
from the date of acquisition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-592": { "value": "
(y) Adoption of new accounting standards and amendments to standards
The table below outlines the new standards and amendments to standards that have been adopted by the Group for the year ended
31\u00a0December\u00a02024. The Group has not early adopted any standard or amendment that has been issued but is not yet effective.\u00a0
Accounting standard update
Effective date
IFRS 16 Leases: Lease Liability in a Sale and Leaseback
Annual periods beginning on or after 1 January 2024.
Nature of change
Impact
Specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the seller-lessee
does not recognise any amount of the gain or loss that relates to the right of use
it\u00a0retains.
The amendments had no impact on the Group\u2019s financial statements.
Accounting standard update
Effective date
IAS 1 Presentation of Financial Statements : Classification of Liabilities as
Current\u00a0or\u00a0Non-current and Non\u2011current Liabilities with Covenants
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the requirements on determining whether a liability is current or non-
current and requires additional disclosures when a liability arising from a loan
agreement is classified as non-current and the entity\u2019s right to defer settlement
is\u00a0contingent on compliance with future covenants within twelve months.
Accounting standard update
Effective date
IFRS 7 Financial Instruments: Disclosures (\u2018IFRS 7\u2019) and IAS 7 Statement of
Cash Flows (\u2018IAS 7\u2019): Disclosures: Supplier Finance Arrangements
Annual periods beginning on or after 1 January 2024.
Impact
Nature of change
The amendments had no impact on the Group\u2019s financial statements.
Clarifies the characteristics of supplier finance arrangements with additional
disclosure requirements intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity\u2019s
liabilities, cash flows and exposure to liquidity risk as they apply to entities that
enter into supplier finance arrangements with third parties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFirstTimeAdoptionExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-593": { "value": "Critical accounting estimates The accounting estimates with a significant risk of material adjustment to the carrying amounts of assets and liabilities within the next financial year were in relation to:\u2022 Impairment of financial assets; and\u2022 Retirement benefit obligations.Impairment of financial assetsThe Group\u2019s accounting policy for impairment of financial assets is set out in accounting policy (q) in note 1. Details of the Group\u2019s expected credit loss ('ECL') allowance are set out in note 20.The key estimates and assumptions that the Group have used in determining the ECL allowance are as follows:\u2022 Establishing the number and relative weightings for forward looking scenarios; \u2022 Inputs into discounted cash-flows (\u2018DCFs\u2019) for certain stage 3 credit impaired obligors; \u2022 The assumptions for measuring ECL (e.g. PD, LGD and EAD and the parameters to be included within the models for modelled ECL); and\u2022 The estimation of post model adjustments where required.The calculation of the ECL allowance is complex and therefore the Group must consider large amounts of information in its determination. This process requires significant use of estimates and assumptions, some of which by their nature, are highly subjective and very sensitive to risk factors such as changes to economic conditions. Changes in the ECL allowance can materially affect net income.On an ongoing basis, the various estimates and assumptions are reviewed in light of differences between actual and previously calculated expected losses. These are then recalibrated and refined to reflect current and evolving economic conditions. The ECL allowance is, in turn, reviewed and approved by the Group Credit Committee on a quarterly basis with final Group levels being approved by the Board Audit Committee. Further detail on the ECL governance process is set out on page 187.The macroeconomic variables used in models to calculate ECL allowance are based on assumptions, forecasts and estimates against\u00a0a backdrop of an evolving economic landscape. Accordingly, developments in local and international factors could have a material bearing on the ECL allowance within the next financial year. The Group\u2019s sensitivity to a range of macroeconomic factors under the (i) base forecast; (ii) upside; and (iii) downside scenarios is set out on pages 194 to 199 of the Risk Management section of this report.DCFs are the most significant input to the ECL calculation for Stage 3 credit impaired borrowers where the gross credit exposure is greater than or equal to \u20ac 1 million for Ireland or greater than or equal to \u00a3 500,000 for the UK. Collateral valuations and the estimated time to realisation of collateral is a key component of the DCF model. The DCF assessment produces a base case ECL which is then adjusted, considering all relevant and supportable information, including but not limited to, historical data analysis, predictive modelling and management judgement, to incorporate the impact of multiple scenarios on the base ECL. The Group has developed a standard approach for the measurement of ECL for the majority of the Group\u2019s exposures where each ECL input parameter (e.g. PD, LGD and EAD) is developed in line with standard modelling methodology. These are discussed further on pages 192 to 193 of the Risk Management section. When considering changes in these assumptions collectively, there is a significant risk of a material adjustment to the Group\u2019s ECL allowance within the next financial year. Where the estimate of ECL does not adequately capture all available forward looking information about the range of possible outcomes, or where there is a significant degree of uncertainty, management may consider it appropriate for an adjustment to ECL. These are referred to\u00a0as post model adjustments and are set out in detail on pages 200 and 201.2\u00a0 Critical accounting judgements and estimates continuedImpairment of financial assets continuedThe sensitivity of the carrying amounts of the ECL to changes in assumptions and estimates relating to inputs into DCFs for certain Stage 3 credit impaired obligors; the assumptions for measuring ECL; and the estimation of post model adjustments where required have not been provided given their diverse nature, their interrelationship and the number of estimates and assumptions involved. Retirement benefit obligations The Group\u2019s accounting policy for retirement benefit obligations is set out in accounting policy (h) in note 1. Details of the Group\u2019s retirement benefit obligations are set out in note 27.The key estimates and assumptions that the Group have used in determining the retirement benefit obligation are as follows:\u2022 In a situation where the Group believes the Trustee has the ability to grant discretionary increases without any funding being provided by the Group, the Group has assumed that the Trustee will grant increases and as a result the scheme\u2019s liabilities include an estimate for this matter; and\u2022 The significant demographic and financial actuarial assumptions used to determine the present value of the retirement benefit obligation. The Trustee of the Irish Scheme has awarded an increase, in certain years, in respect of pensions eligible for discretionary pension in payment increases notwithstanding a decision by the Group not to fund such increases. This reflected the ability of the Trustee to grant an increase when the financial position of the scheme would enable such an increase at that point in time. Taking these decisions by the Trustee into consideration, the long term assumption for future increases in pension in payment reflects an assessment of the Trustee\u2019s ability to grant further increases without any funding from the Group, capped at a long-term inflation assumption. Having taken actuarial advice, the Group has adopted a rate of 1.90% (31\u00a0December 2023: 2.05%) for the long-term assumption for future discretionary increases in pensions in payment (which is the lower of either the surplus available to the Trustee to distribute or the long-term inflation assumption). This increased the scheme liabilities by \u20ac\u00a0808\u00a0million at 31 December 2024 (31 December 2023: \u20ac 822 million). A sensitivity analysis for the rate of increase in pensions in payment is not provided, as this rate is dependent on the surplus available to the Trustee to distribute and the advice of the actuary.The actuarial valuation of the schemes\u2019 liabilities is dependent upon a number of financial and demographic assumptions which are inherently uncertain. Changes to those assumptions could materially impact the reported amount for schemes\u2019 liabilities and the actuarial gains/losses reported in equity. Details of the assumptions adopted by the Group in\u00a0calculating the schemes\u2019 liabilities and a sensitivity analysis for the principal assumptions used to measure the schemes\u2019 liabilities are set\u00a0out in note 27 to the financial statements.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-596": { "value": "
3\u00a0 Segmental information
Segment overview
The Group has identified reportable segments on the basis of internal
reports about components of the Group that are regularly reviewed by
the Chief Operating Decision Maker (\u2018CODM\u2019) in order to allocate
resources to the segment and assess its performance.
Transactions between operating segments are on normal commercial
terms and conditions, with internal charges and transfer pricing
adjustments reflected in the performance of each operating segment.
Revenue sharing agreements are used to allocate external
customer\u00a0revenues to an operating segment on a reasonable basis.
The geographical distribution of total revenue is based primarily on
the\u00a0location of the office recording the transaction.
In 2024 the Group introduced a new customer facing segment,
\u2018Climate\u00a0Capital\u2019, increasing the\u00a0Group\u2019s reportable segments from four
to five. The Group\u2019s performance is now therefore managed and
reported across Retail Banking, AIB Capital Markets (\u2018Capital Markets\u2019),
Climate Capital, AIB UK and Group segments. Comparative segment
information for the\u00a0prior period has been re-presented. Segment
performance excludes exceptional items.
Retail Banking
Our leading Irish retail franchise provides a comprehensive range of
products and services to more than 3 million customers delivered
through our branch, digital and phone banking channels; with an
expanded reach into the retail customer base via EBS, Haven,
AIB\u00a0Merchant Services, Payzone, Nifti and AIB life.
\u2022 Homes and Consumer are responsible for meeting the everyday
banking needs of customers in Ireland by delivering innovative
products, propositions and services and for growing our market
leading positions. Our aim is to achieve a seamless and transparent
customer experience across all our products and services including
mortgages, current accounts, personal lending, payments and credit
cards, deposits, insurance and wealth.
\u2022 SME serves our micro and small SME customers through our
sector\u2011led strategy and local expertise with an extensive product and
services offering. Our aim is to help our customers create and build
sustainable businesses in their communities.
Capital Markets
Capital Markets provides institutional, corporate and business banking
services to the Group\u2019s larger customers and customers requiring
specific sector or product expertise. Capital Markets\u2019 relationship-driven
model serves customers through sector specialist teams including:
corporate banking, real estate finance and business banking.
In addition to traditional credit products, Capital Markets offers
customers foreign exchange and interest rate risk management
products, cash management products, trade finance, mezzanine
finance, structured and specialist finance and equity investments,
as\u00a0well as Private Banking services and advice. Capital Markets also
has syndicated and international finance teams based in Dublin and in
New York. Goodbody offers further capabilities in wealth management,
corporate finance, asset management and wider capital markets
propositions.
Climate Capital
Climate Capital is a new segment comprised of assets and resources
previously residing in Capital Markets and AIB UK segments.
Climate Capital specialises in lending to large scale renewable energy
and infrastructure projects, which are key drivers for sustainable
economic growth. The business serves the Irish, UK, European
and\u00a0North American markets through offices in Dublin, London and
New\u00a0York.
AIB UK
AIB UK offers corporate, retail and business banking services in two
distinct markets:
\u2022 A sector-led corporate bank supporting mid to large corporates
focused on housing, commercial real estate, health, hotels and
manufacturing businesses across both Great Britain and Northern
Ireland. Services include lending, treasury, trade facilities, asset
finance and invoice discounting.
\u2022 A full-service retail bank in Northern Ireland (\u2018AIB (NI)\u2019) to personal
and business customers with a focus on mortgage and
business\u00a0lending.
Group
Group comprises wholesale treasury activities and Group control and
support functions. Treasury manages the Group\u2019s liquidity and funding
positions and provides customer treasury services and economic
research. The Group control and support functions in the period
included Technology and Data, Operations and Business Services,
Finance, Risk,\u00a0Legal and Corporate Governance, Chief Customer
Office, Human Resources, Strategy and Sustainability, Corporate
Affairs and Group Internal Audit.
Segment allocations
Under the Group's cost allocation methodology, substantially all of the
costs of the Group's control, support and Treasury functions are
allocated to Retail Banking, Capital Markets, Climate Capital and AIB
UK. In addition, certain Bank levies and regulatory fees, such as the
Irish bank levy, are allocated to the Retail Banking, Capital Markets and
Climate Capital segments.
Funding and liquidity income/charges are based on each segment\u2019s
funding requirements and the Group\u2019s funding cost profile, which
is\u00a0informed by wholesale and retail funding costs. Income attributable
to\u00a0capital is allocated to segments based on each segment\u2019s
capital\u00a0requirement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-595": { "value": "
3\u00a0 Segmental information
Segment overview
The Group has identified reportable segments on the basis of internal
reports about components of the Group that are regularly reviewed by
the Chief Operating Decision Maker (\u2018CODM\u2019) in order to allocate
resources to the segment and assess its performance.
Transactions between operating segments are on normal commercial
terms and conditions, with internal charges and transfer pricing
adjustments reflected in the performance of each operating segment.
Revenue sharing agreements are used to allocate external
customer\u00a0revenues to an operating segment on a reasonable basis.
The geographical distribution of total revenue is based primarily on
the\u00a0location of the office recording the transaction.
In 2024 the Group introduced a new customer facing segment,
\u2018Climate\u00a0Capital\u2019, increasing the\u00a0Group\u2019s reportable segments from four
to five. The Group\u2019s performance is now therefore managed and
reported across Retail Banking, AIB Capital Markets (\u2018Capital Markets\u2019),
Climate Capital, AIB UK and Group segments. Comparative segment
information for the\u00a0prior period has been re-presented. Segment
performance excludes exceptional items.
Retail Banking
Our leading Irish retail franchise provides a comprehensive range of
products and services to more than 3 million customers delivered
through our branch, digital and phone banking channels; with an
expanded reach into the retail customer base via EBS, Haven,
AIB\u00a0Merchant Services, Payzone, Nifti and AIB life.
\u2022 Homes and Consumer are responsible for meeting the everyday
banking needs of customers in Ireland by delivering innovative
products, propositions and services and for growing our market
leading positions. Our aim is to achieve a seamless and transparent
customer experience across all our products and services including
mortgages, current accounts, personal lending, payments and credit
cards, deposits, insurance and wealth.
\u2022 SME serves our micro and small SME customers through our
sector\u2011led strategy and local expertise with an extensive product and
services offering. Our aim is to help our customers create and build
sustainable businesses in their communities.
Capital Markets
Capital Markets provides institutional, corporate and business banking
services to the Group\u2019s larger customers and customers requiring
specific sector or product expertise. Capital Markets\u2019 relationship-driven
model serves customers through sector specialist teams including:
corporate banking, real estate finance and business banking.
In addition to traditional credit products, Capital Markets offers
customers foreign exchange and interest rate risk management
products, cash management products, trade finance, mezzanine
finance, structured and specialist finance and equity investments,
as\u00a0well as Private Banking services and advice. Capital Markets also
has syndicated and international finance teams based in Dublin and in
New York. Goodbody offers further capabilities in wealth management,
corporate finance, asset management and wider capital markets
propositions.
Climate Capital
Climate Capital is a new segment comprised of assets and resources
previously residing in Capital Markets and AIB UK segments.
Climate Capital specialises in lending to large scale renewable energy
and infrastructure projects, which are key drivers for sustainable
economic growth. The business serves the Irish, UK, European
and\u00a0North American markets through offices in Dublin, London and
New\u00a0York.
AIB UK
AIB UK offers corporate, retail and business banking services in two
distinct markets:
\u2022 A sector-led corporate bank supporting mid to large corporates
focused on housing, commercial real estate, health, hotels and
manufacturing businesses across both Great Britain and Northern
Ireland. Services include lending, treasury, trade facilities, asset
finance and invoice discounting.
\u2022 A full-service retail bank in Northern Ireland (\u2018AIB (NI)\u2019) to personal
and business customers with a focus on mortgage and
business\u00a0lending.
Group
Group comprises wholesale treasury activities and Group control and
support functions. Treasury manages the Group\u2019s liquidity and funding
positions and provides customer treasury services and economic
research. The Group control and support functions in the period
included Technology and Data, Operations and Business Services,
Finance, Risk,\u00a0Legal and Corporate Governance, Chief Customer
Office, Human Resources, Strategy and Sustainability, Corporate
Affairs and Group Internal Audit.
Segment allocations
Under the Group's cost allocation methodology, substantially all of the
costs of the Group's control, support and Treasury functions are
allocated to Retail Banking, Capital Markets, Climate Capital and AIB
UK. In addition, certain Bank levies and regulatory fees, such as the
Irish bank levy, are allocated to the Retail Banking, Capital Markets and
Climate Capital segments.
Funding and liquidity income/charges are based on each segment\u2019s
funding requirements and the Group\u2019s funding cost profile, which
is\u00a0informed by wholesale and retail funding costs. Income attributable
to\u00a0capital is allocated to segments based on each segment\u2019s
capital\u00a0requirement.
3\u00a0 Segmental information continued
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Operations by business segment
Net interest income
2,633
906
110
379
101
4,129
\u2014
4,129
Other income
509
223
21
26
\u2014
779
20
799
Of which: Net fee and commission income*
455
158
13
37
3
666
15
2
681
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Other
54
65
8
(11)
(3)
113
5
3
118
Total operating income
3,142
1,129
131
405
101
4,908
20
4,928
Other operating expenses
(1,353)
(375)
(47)
(182)
(14)
(1,971)
(86)
(2,057)
Of which: Personnel expenses
(611)
(239)
(29)
(95)
(6)
(980)
(4)
4
(984)
General and administrative expenses
(510)
(97)
(12)
(66)
(5)
(690)
(82)
5-7
(772)
Depreciation, impairment and amortisation
(232)
(39)
(6)
(21)
(3)
(301)
\u2014
(301)
Bank levies and regulatory fees
(104)
(19)
(2)
(2)
(11)
(138)
\u2014
(138)
Total operating expenses
(1,457)
(394)
(49)
(184)
(25)
(2,109)
(86)
(2,195)
Operating profit/(loss) before impairment losses
1,685
735
82
221
76
2,799
(66)
2,733
Net credit impairment charge
(28)
83
(22)
(90)
2
(55)
\u2014
(55)
Operating profit/(loss)
1,657
818
60
131
78
2,744
(66)
2,678
Income/(loss) from equity accounted investments
21
\u2014
\u2014
6
(1)
26
\u2014
26
Loss on disposal of business
\u2014
\u2014
\u2014
\u2014
(2)
(2)
\u2014
(2)
Profit/(loss) before taxation
1,678
818
60
137
75
2,768
(66)
2,702
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year. Exceptional items
are set out in 2 to 7 below.
2. Run-off fee receivable on exit of a servicing arrangement.
3. Gain on disposal of loan portfolios and other operating income.
4. Restructuring costs.
5. Customer redress costs.
6. Inorganic transaction costs.
7. Other costs.
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
210
26
1
12
1
250
\u2014
250
Card income
169
8
\u2014
12
\u2014
189
\u2014
189
Customer related foreign exchange2
47
36
1
6
1
91
\u2014
91
Lending related fees2
8
28
9
11
\u2014
56
\u2014
56
Specialised payment services fees (Payzone)2,3
128
\u2014
\u2014
\u2014
\u2014
128
\u2014
128
Stockbroking client fees and commissions
\u2014
57
\u2014
\u2014
\u2014
57
\u2014
57
Asset management and advisory fees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other fees and commissions
43
9
2
\u2014
5
59
15
4
74
Fee and commission income
605
164
13
41
7
830
15
845
Customer account expenses
(1)
(1)
\u2014
\u2014
\u2014
(2)
\u2014
(2)
Specialised payment services expenses (Payzone)2,3
(108)
\u2014
\u2014
\u2014
\u2014
(108)
\u2014
(108)
Card expenses
(36)
(1)
\u2014
(4)
\u2014
(41)
\u2014
(41)
Other fee and commission expenses
(5)
(4)
\u2014
\u2014
(4)
(13)
\u2014
(13)
Fee and commission expense
(150)
(6)
\u2014
(4)
(4)
(164)
\u2014
(164)
Total net fee and commission income
455
158
13
37
3
666
15
681
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year.
2. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
3. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
4. Run-off fee receivable on exit of a servicing arrangement.
Fees and commissions which are an integral part of the effective interest rate are recognised as part of interest and similar income (note 4) or
interest and similar expense (note 5).
3\u00a0 Segmental information continued
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Operations by business segment
Net interest income
2,409
841
89
391
111
3,841
\u2014
3,841
Other income
662
185
13
39
1
900
(19)
881
Of which: Net fee and commission income*
438
143
11
36
5
633
\u2014
633
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Other
224
42
2
3
(4)
267
(19)
2,5
248
Total operating income
3,071
1,026
102
430
112
4,741
(19)
4,722
Other operating expenses
(1,253)
(353)
(35)
(170)
(15)
(1,826)
(131)
(1,957)
Of which: Personnel expenses
(564)
(221)
(22)
(89)
(6)
(902)
(10)
3
(912)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 General and administrative expenses
(465)
(92)
(9)
(58)
(5)
(629)
(121)
4-6
(750)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Depreciation, impairment and amortisation
(224)
(40)
(4)
(23)
(4)
(295)
\u2014
(295)
Bank levies and regulatory fees
(51)
(12)
\u2014
(1)
(121)
(185)
\u2014
(185)
Total operating expenses
(1,304)
(365)
(35)
(171)
(136)
(2,011)
(131)
(2,142)
Operating profit/(loss) before impairment losses
1,767
661
67
259
(24)
2,730
(150)
2,580
Net credit impairment writeback/(charge)
(57)
(85)
9
(38)
(1)
(172)
\u2014
(172)
Operating profit/(loss)
1,710
576
76
221
(25)
2,558
(150)
2,408
Income/(loss) from equity accounted investments
7
\u2014
\u2014
6
(1)
12
\u2014
12
Profit/(loss) on disposal of business
\u2014
2
\u2014
\u2014
(28)
(26)
\u2014
(26)
Profit/(loss) before taxation
1,717
578
76
227
(54)
2,544
(150)
2,394
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year. Exceptional items
are set out in 2 to 6 below.
2. Loss on disposal of loan portfolios.
3. Termination benefits.
4. Customer redress costs.
5. Restructuring costs.
6. Inorganic transaction costs.
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
202
26
\u2014
12
\u2014
240
\u2014
240
Card income
166
9
\u2014
12
\u2014
187
\u2014
187
Customer related foreign exchange1
47
32
1
6
2
88
\u2014
88
Lending related fees1
8
27
9
10
\u2014
54
\u2014
54
Specialised payment services fees (Payzone)1,2
138
\u2014
\u2014
\u2014
\u2014
138
\u2014
138
Stockbroking client fees and commissions
\u2014
46
\u2014
\u2014
\u2014
46
\u2014
46
Asset management and advisory fees
\u2014
4
\u2014
\u2014
\u2014
4
\u2014
4
Other fees and commissions
36
5
1
\u2014
7
49
\u2014
49
Fee and commission income
597
149
11
40
9
806
\u2014
806
Specialised payment services expenses (Payzone)1,2
(119)
\u2014
\u2014
\u2014
\u2014
(119)
\u2014
(119)
Card expenses
(34)
(1)
\u2014
(4)
\u2014
(39)
\u2014
(39)
Other fee and commission expenses
(6)
(5)
\u2014
\u2014
(4)
(15)
\u2014
(15)
Fee and commission expense
(159)
(6)
\u2014
(4)
(4)
(173)
\u2014
(173)
Total net fee and commission income
438
143
11
36
1
5
633
\u2014
633
1. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
2. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
3\u00a0 Segmental information continued
31 December 2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Other amounts \u2013 statement of financial position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Loans and advances to customers:
\u2013 measured at amortised cost
41,570
16,885
5,483
5,837
50
69,825
\u2013 measured at FVTPL
\u2014
64
\u2014
\u2014
\u2014
64
Total loans and advances to customers
41,570
16,949
5,483
5,837
50
69,889
Customer accounts
84,206
15,555
365
8,575
1,182
109,883
31 December 2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Other amounts \u2013 statement of financial position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Loans and advances to customers:
\u2013 measured at amortised cost
39,227
16,666
4,091
5,437
28
65,449
\u2013 measured at FVTPL
\u2014
42
\u2014
\u2014
\u2014
42
Total loans and advances to customers
39,227
16,708
4,091
5,437
28
65,491
Customer accounts
80,454
14,856
342
7,977
1,153
104,782
Year to 31 December
2024
Ireland
United
Kingdom
Rest of
the World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,410
483
35
4,928
Inter-geographical segment revenue
21
31
(52)
\u2014
Total revenue
4,431
514
(17)
4,928
Year to 31 December
2023
Ireland
United
Kingdom
Rest of the
World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,042
642
38
4,722
Inter-geographical segment revenue
158
(115)
(43)
\u2014
Total revenue
4,200
527
(5)
4,722
Revenue from external customers comprises net fee and commission income (note 3), interest and similar income (note 4) and interest and similar
expense (note 5) and all other items of income (notes 6 to 9).
31 December 2024
Ireland
United
Kingdom
Rest of
the World
Total
Geographic Information
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Non-current assets2
1,387
55
8
1,450
31 December 2023
Ireland
United
Kingdom
Rest of the
World
Total
Geographic Information
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Non-current assets2
1,429
53
1
1,483
1. For details of significant geographic concentrations, see the \u2018Risk management\u2019 section.
2. Non-current assets comprise intangible assets, goodwill and property, plant and equipment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOperatingSegmentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-594": { "value": "
3\u00a0 Segmental information
Segment overview
The Group has identified reportable segments on the basis of internal
reports about components of the Group that are regularly reviewed by
the Chief Operating Decision Maker (\u2018CODM\u2019) in order to allocate
resources to the segment and assess its performance.
Transactions between operating segments are on normal commercial
terms and conditions, with internal charges and transfer pricing
adjustments reflected in the performance of each operating segment.
Revenue sharing agreements are used to allocate external
customer\u00a0revenues to an operating segment on a reasonable basis.
The geographical distribution of total revenue is based primarily on
the\u00a0location of the office recording the transaction.
In 2024 the Group introduced a new customer facing segment,
\u2018Climate\u00a0Capital\u2019, increasing the\u00a0Group\u2019s reportable segments from four
to five. The Group\u2019s performance is now therefore managed and
reported across Retail Banking, AIB Capital Markets (\u2018Capital Markets\u2019),
Climate Capital, AIB UK and Group segments. Comparative segment
information for the\u00a0prior period has been re-presented. Segment
performance excludes exceptional items.
Retail Banking
Our leading Irish retail franchise provides a comprehensive range of
products and services to more than 3 million customers delivered
through our branch, digital and phone banking channels; with an
expanded reach into the retail customer base via EBS, Haven,
AIB\u00a0Merchant Services, Payzone, Nifti and AIB life.
\u2022 Homes and Consumer are responsible for meeting the everyday
banking needs of customers in Ireland by delivering innovative
products, propositions and services and for growing our market
leading positions. Our aim is to achieve a seamless and transparent
customer experience across all our products and services including
mortgages, current accounts, personal lending, payments and credit
cards, deposits, insurance and wealth.
\u2022 SME serves our micro and small SME customers through our
sector\u2011led strategy and local expertise with an extensive product and
services offering. Our aim is to help our customers create and build
sustainable businesses in their communities.
Capital Markets
Capital Markets provides institutional, corporate and business banking
services to the Group\u2019s larger customers and customers requiring
specific sector or product expertise. Capital Markets\u2019 relationship-driven
model serves customers through sector specialist teams including:
corporate banking, real estate finance and business banking.
In addition to traditional credit products, Capital Markets offers
customers foreign exchange and interest rate risk management
products, cash management products, trade finance, mezzanine
finance, structured and specialist finance and equity investments,
as\u00a0well as Private Banking services and advice. Capital Markets also
has syndicated and international finance teams based in Dublin and in
New York. Goodbody offers further capabilities in wealth management,
corporate finance, asset management and wider capital markets
propositions.
Climate Capital
Climate Capital is a new segment comprised of assets and resources
previously residing in Capital Markets and AIB UK segments.
Climate Capital specialises in lending to large scale renewable energy
and infrastructure projects, which are key drivers for sustainable
economic growth. The business serves the Irish, UK, European
and\u00a0North American markets through offices in Dublin, London and
New\u00a0York.
AIB UK
AIB UK offers corporate, retail and business banking services in two
distinct markets:
\u2022 A sector-led corporate bank supporting mid to large corporates
focused on housing, commercial real estate, health, hotels and
manufacturing businesses across both Great Britain and Northern
Ireland. Services include lending, treasury, trade facilities, asset
finance and invoice discounting.
\u2022 A full-service retail bank in Northern Ireland (\u2018AIB (NI)\u2019) to personal
and business customers with a focus on mortgage and
business\u00a0lending.
Group
Group comprises wholesale treasury activities and Group control and
support functions. Treasury manages the Group\u2019s liquidity and funding
positions and provides customer treasury services and economic
research. The Group control and support functions in the period
included Technology and Data, Operations and Business Services,
Finance, Risk,\u00a0Legal and Corporate Governance, Chief Customer
Office, Human Resources, Strategy and Sustainability, Corporate
Affairs and Group Internal Audit.
Segment allocations
Under the Group's cost allocation methodology, substantially all of the
costs of the Group's control, support and Treasury functions are
allocated to Retail Banking, Capital Markets, Climate Capital and AIB
UK. In addition, certain Bank levies and regulatory fees, such as the
Irish bank levy, are allocated to the Retail Banking, Capital Markets and
Climate Capital segments.
Funding and liquidity income/charges are based on each segment\u2019s
funding requirements and the Group\u2019s funding cost profile, which
is\u00a0informed by wholesale and retail funding costs. Income attributable
to\u00a0capital is allocated to segments based on each segment\u2019s
capital\u00a0requirement.
3\u00a0 Segmental information continued
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Operations by business segment
Net interest income
2,633
906
110
379
101
4,129
\u2014
4,129
Other income
509
223
21
26
\u2014
779
20
799
Of which: Net fee and commission income*
455
158
13
37
3
666
15
2
681
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Other
54
65
8
(11)
(3)
113
5
3
118
Total operating income
3,142
1,129
131
405
101
4,908
20
4,928
Other operating expenses
(1,353)
(375)
(47)
(182)
(14)
(1,971)
(86)
(2,057)
Of which: Personnel expenses
(611)
(239)
(29)
(95)
(6)
(980)
(4)
4
(984)
General and administrative expenses
(510)
(97)
(12)
(66)
(5)
(690)
(82)
5-7
(772)
Depreciation, impairment and amortisation
(232)
(39)
(6)
(21)
(3)
(301)
\u2014
(301)
Bank levies and regulatory fees
(104)
(19)
(2)
(2)
(11)
(138)
\u2014
(138)
Total operating expenses
(1,457)
(394)
(49)
(184)
(25)
(2,109)
(86)
(2,195)
Operating profit/(loss) before impairment losses
1,685
735
82
221
76
2,799
(66)
2,733
Net credit impairment charge
(28)
83
(22)
(90)
2
(55)
\u2014
(55)
Operating profit/(loss)
1,657
818
60
131
78
2,744
(66)
2,678
Income/(loss) from equity accounted investments
21
\u2014
\u2014
6
(1)
26
\u2014
26
Loss on disposal of business
\u2014
\u2014
\u2014
\u2014
(2)
(2)
\u2014
(2)
Profit/(loss) before taxation
1,678
818
60
137
75
2,768
(66)
2,702
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year. Exceptional items
are set out in 2 to 7 below.
2. Run-off fee receivable on exit of a servicing arrangement.
3. Gain on disposal of loan portfolios and other operating income.
4. Restructuring costs.
5. Customer redress costs.
6. Inorganic transaction costs.
7. Other costs.
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
210
26
1
12
1
250
\u2014
250
Card income
169
8
\u2014
12
\u2014
189
\u2014
189
Customer related foreign exchange2
47
36
1
6
1
91
\u2014
91
Lending related fees2
8
28
9
11
\u2014
56
\u2014
56
Specialised payment services fees (Payzone)2,3
128
\u2014
\u2014
\u2014
\u2014
128
\u2014
128
Stockbroking client fees and commissions
\u2014
57
\u2014
\u2014
\u2014
57
\u2014
57
Asset management and advisory fees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other fees and commissions
43
9
2
\u2014
5
59
15
4
74
Fee and commission income
605
164
13
41
7
830
15
845
Customer account expenses
(1)
(1)
\u2014
\u2014
\u2014
(2)
\u2014
(2)
Specialised payment services expenses (Payzone)2,3
(108)
\u2014
\u2014
\u2014
\u2014
(108)
\u2014
(108)
Card expenses
(36)
(1)
\u2014
(4)
\u2014
(41)
\u2014
(41)
Other fee and commission expenses
(5)
(4)
\u2014
\u2014
(4)
(13)
\u2014
(13)
Fee and commission expense
(150)
(6)
\u2014
(4)
(4)
(164)
\u2014
(164)
Total net fee and commission income
455
158
13
37
3
666
15
681
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year.
2. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
3. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
4. Run-off fee receivable on exit of a servicing arrangement.
Fees and commissions which are an integral part of the effective interest rate are recognised as part of interest and similar income (note 4) or
interest and similar expense (note 5).
3\u00a0 Segmental information continued
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Operations by business segment
Net interest income
2,409
841
89
391
111
3,841
\u2014
3,841
Other income
662
185
13
39
1
900
(19)
881
Of which: Net fee and commission income*
438
143
11
36
5
633
\u2014
633
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Other
224
42
2
3
(4)
267
(19)
2,5
248
Total operating income
3,071
1,026
102
430
112
4,741
(19)
4,722
Other operating expenses
(1,253)
(353)
(35)
(170)
(15)
(1,826)
(131)
(1,957)
Of which: Personnel expenses
(564)
(221)
(22)
(89)
(6)
(902)
(10)
3
(912)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 General and administrative expenses
(465)
(92)
(9)
(58)
(5)
(629)
(121)
4-6
(750)
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Depreciation, impairment and amortisation
(224)
(40)
(4)
(23)
(4)
(295)
\u2014
(295)
Bank levies and regulatory fees
(51)
(12)
\u2014
(1)
(121)
(185)
\u2014
(185)
Total operating expenses
(1,304)
(365)
(35)
(171)
(136)
(2,011)
(131)
(2,142)
Operating profit/(loss) before impairment losses
1,767
661
67
259
(24)
2,730
(150)
2,580
Net credit impairment writeback/(charge)
(57)
(85)
9
(38)
(1)
(172)
\u2014
(172)
Operating profit/(loss)
1,710
576
76
221
(25)
2,558
(150)
2,408
Income/(loss) from equity accounted investments
7
\u2014
\u2014
6
(1)
12
\u2014
12
Profit/(loss) on disposal of business
\u2014
2
\u2014
\u2014
(28)
(26)
\u2014
(26)
Profit/(loss) before taxation
1,717
578
76
227
(54)
2,544
(150)
2,394
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year. Exceptional items
are set out in 2 to 6 below.
2. Loss on disposal of loan portfolios.
3. Termination benefits.
4. Customer redress costs.
5. Restructuring costs.
6. Inorganic transaction costs.
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
202
26
\u2014
12
\u2014
240
\u2014
240
Card income
166
9
\u2014
12
\u2014
187
\u2014
187
Customer related foreign exchange1
47
32
1
6
2
88
\u2014
88
Lending related fees1
8
27
9
10
\u2014
54
\u2014
54
Specialised payment services fees (Payzone)1,2
138
\u2014
\u2014
\u2014
\u2014
138
\u2014
138
Stockbroking client fees and commissions
\u2014
46
\u2014
\u2014
\u2014
46
\u2014
46
Asset management and advisory fees
\u2014
4
\u2014
\u2014
\u2014
4
\u2014
4
Other fees and commissions
36
5
1
\u2014
7
49
\u2014
49
Fee and commission income
597
149
11
40
9
806
\u2014
806
Specialised payment services expenses (Payzone)1,2
(119)
\u2014
\u2014
\u2014
\u2014
(119)
\u2014
(119)
Card expenses
(34)
(1)
\u2014
(4)
\u2014
(39)
\u2014
(39)
Other fee and commission expenses
(6)
(5)
\u2014
\u2014
(4)
(15)
\u2014
(15)
Fee and commission expense
(159)
(6)
\u2014
(4)
(4)
(173)
\u2014
(173)
Total net fee and commission income
438
143
11
36
1
5
633
\u2014
633
1. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
2. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
3\u00a0 Segmental information continued
31 December 2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Other amounts \u2013 statement of financial position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Loans and advances to customers:
\u2013 measured at amortised cost
41,570
16,885
5,483
5,837
50
69,825
\u2013 measured at FVTPL
\u2014
64
\u2014
\u2014
\u2014
64
Total loans and advances to customers
41,570
16,949
5,483
5,837
50
69,889
Customer accounts
84,206
15,555
365
8,575
1,182
109,883
31 December 2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Other amounts \u2013 statement of financial position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Loans and advances to customers:
\u2013 measured at amortised cost
39,227
16,666
4,091
5,437
28
65,449
\u2013 measured at FVTPL
\u2014
42
\u2014
\u2014
\u2014
42
Total loans and advances to customers
39,227
16,708
4,091
5,437
28
65,491
Customer accounts
80,454
14,856
342
7,977
1,153
104,782
Year to 31 December
2024
Ireland
United
Kingdom
Rest of
the World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,410
483
35
4,928
Inter-geographical segment revenue
21
31
(52)
\u2014
Total revenue
4,431
514
(17)
4,928
Year to 31 December
2023
Ireland
United
Kingdom
Rest of the
World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,042
642
38
4,722
Inter-geographical segment revenue
158
(115)
(43)
\u2014
Total revenue
4,200
527
(5)
4,722
Revenue from external customers comprises net fee and commission income (note 3), interest and similar income (note 4) and interest and similar
expense (note 5) and all other items of income (notes 6 to 9).
31 December 2024
Ireland
United
Kingdom
Rest of
the World
Total
Geographic Information
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Non-current assets2
1,387
55
8
1,450
31 December 2023
Ireland
United
Kingdom
Rest of the
World
Total
Geographic Information
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Non-current assets2
1,429
53
1
1,483
1. For details of significant geographic concentrations, see the \u2018Risk management\u2019 section.
2. Non-current assets comprise intangible assets, goodwill and property, plant and equipment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-598": { "value": "
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
210
26
1
12
1
250
\u2014
250
Card income
169
8
\u2014
12
\u2014
189
\u2014
189
Customer related foreign exchange2
47
36
1
6
1
91
\u2014
91
Lending related fees2
8
28
9
11
\u2014
56
\u2014
56
Specialised payment services fees (Payzone)2,3
128
\u2014
\u2014
\u2014
\u2014
128
\u2014
128
Stockbroking client fees and commissions
\u2014
57
\u2014
\u2014
\u2014
57
\u2014
57
Asset management and advisory fees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other fees and commissions
43
9
2
\u2014
5
59
15
4
74
Fee and commission income
605
164
13
41
7
830
15
845
Customer account expenses
(1)
(1)
\u2014
\u2014
\u2014
(2)
\u2014
(2)
Specialised payment services expenses (Payzone)2,3
(108)
\u2014
\u2014
\u2014
\u2014
(108)
\u2014
(108)
Card expenses
(36)
(1)
\u2014
(4)
\u2014
(41)
\u2014
(41)
Other fee and commission expenses
(5)
(4)
\u2014
\u2014
(4)
(13)
\u2014
(13)
Fee and commission expense
(150)
(6)
\u2014
(4)
(4)
(164)
\u2014
(164)
Total net fee and commission income
455
158
13
37
3
666
15
681
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year.
2. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
3. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
4. Run-off fee receivable on exit of a servicing arrangement.
Fees and commissions which are an integral part of the effective interest rate are recognised as part of interest and similar income (note 4) or
interest and similar expense (note 5).
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
202
26
\u2014
12
\u2014
240
\u2014
240
Card income
166
9
\u2014
12
\u2014
187
\u2014
187
Customer related foreign exchange1
47
32
1
6
2
88
\u2014
88
Lending related fees1
8
27
9
10
\u2014
54
\u2014
54
Specialised payment services fees (Payzone)1,2
138
\u2014
\u2014
\u2014
\u2014
138
\u2014
138
Stockbroking client fees and commissions
\u2014
46
\u2014
\u2014
\u2014
46
\u2014
46
Asset management and advisory fees
\u2014
4
\u2014
\u2014
\u2014
4
\u2014
4
Other fees and commissions
36
5
1
\u2014
7
49
\u2014
49
Fee and commission income
597
149
11
40
9
806
\u2014
806
Specialised payment services expenses (Payzone)1,2
(119)
\u2014
\u2014
\u2014
\u2014
(119)
\u2014
(119)
Card expenses
(34)
(1)
\u2014
(4)
\u2014
(39)
\u2014
(39)
Other fee and commission expenses
(6)
(5)
\u2014
\u2014
(4)
(15)
\u2014
(15)
Fee and commission expense
(159)
(6)
\u2014
(4)
(4)
(173)
\u2014
(173)
Total net fee and commission income
438
143
11
36
1
5
633
\u2014
633
1. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
2. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
Year to 31 December
2024
Ireland
United
Kingdom
Rest of
the World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,410
483
35
4,928
Inter-geographical segment revenue
21
31
(52)
\u2014
Total revenue
4,431
514
(17)
4,928
Year to 31 December
2023
Ireland
United
Kingdom
Rest of the
World
Total
Geographic information1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Gross external revenue
4,042
642
38
4,722
Inter-geographical segment revenue
158
(115)
(43)
\u2014
Total revenue
4,200
527
(5)
4,722
Revenue from external customers comprises net fee and commission income (note 3), interest and similar income (note 4) and interest and similar
expense (note 5) and all other items of income (notes 6 to 9).
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-597": { "value": "
2024
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
1
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
210
26
1
12
1
250
\u2014
250
Card income
169
8
\u2014
12
\u2014
189
\u2014
189
Customer related foreign exchange2
47
36
1
6
1
91
\u2014
91
Lending related fees2
8
28
9
11
\u2014
56
\u2014
56
Specialised payment services fees (Payzone)2,3
128
\u2014
\u2014
\u2014
\u2014
128
\u2014
128
Stockbroking client fees and commissions
\u2014
57
\u2014
\u2014
\u2014
57
\u2014
57
Asset management and advisory fees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other fees and commissions
43
9
2
\u2014
5
59
15
4
74
Fee and commission income
605
164
13
41
7
830
15
845
Customer account expenses
(1)
(1)
\u2014
\u2014
\u2014
(2)
\u2014
(2)
Specialised payment services expenses (Payzone)2,3
(108)
\u2014
\u2014
\u2014
\u2014
(108)
\u2014
(108)
Card expenses
(36)
(1)
\u2014
(4)
\u2014
(41)
\u2014
(41)
Other fee and commission expenses
(5)
(4)
\u2014
\u2014
(4)
(13)
\u2014
(13)
Fee and commission expense
(150)
(6)
\u2014
(4)
(4)
(164)
\u2014
(164)
Total net fee and commission income
455
158
13
37
3
666
15
681
1. Exceptional items are shown separately above. These are items that Management view as distorting comparability of performance year-on-year.
2. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
3. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
4. Run-off fee receivable on exit of a servicing arrangement.
Fees and commissions which are an integral part of the effective interest rate are recognised as part of interest and similar income (note 4) or
interest and similar expense (note 5).
2023
Retail
Banking
Capital
Markets
Climate
Capital
AIB UK
Group
Total
Exceptional
items
Total
*Net fee and commission income
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Customer accounts
202
26
\u2014
12
\u2014
240
\u2014
240
Card income
166
9
\u2014
12
\u2014
187
\u2014
187
Customer related foreign exchange1
47
32
1
6
2
88
\u2014
88
Lending related fees1
8
27
9
10
\u2014
54
\u2014
54
Specialised payment services fees (Payzone)1,2
138
\u2014
\u2014
\u2014
\u2014
138
\u2014
138
Stockbroking client fees and commissions
\u2014
46
\u2014
\u2014
\u2014
46
\u2014
46
Asset management and advisory fees
\u2014
4
\u2014
\u2014
\u2014
4
\u2014
4
Other fees and commissions
36
5
1
\u2014
7
49
\u2014
49
Fee and commission income
597
149
11
40
9
806
\u2014
806
Specialised payment services expenses (Payzone)1,2
(119)
\u2014
\u2014
\u2014
\u2014
(119)
\u2014
(119)
Card expenses
(34)
(1)
\u2014
(4)
\u2014
(39)
\u2014
(39)
Other fee and commission expenses
(6)
(5)
\u2014
\u2014
(4)
(15)
\u2014
(15)
Fee and commission expense
(159)
(6)
\u2014
(4)
(4)
(173)
\u2014
(173)
Total net fee and commission income
438
143
11
36
1
5
633
\u2014
633
1. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
2. Specialised payment services (Payzone): fee income and fee expenses in respect of services and prepaid credits for cellular phone and utilities sold to third parties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-602": { "value": "
4\u00a0 Interest and similar income
2024
2023
\u20ac m
\u20ac m
Interest on loans and advances to customers at amortised cost1
2,715
2,295
Interest on loans and advances to banks at amortised cost
1,445
1,267
Interest on securities financing at amortised cost
271
273
Interest on investment securities
842
714
Interest income calculated using the effective interest rate method
5,273
4,549
Interest income on finance leases and hire purchase contracts
94
80
Interest income on financial assets at FVTPL
9
16
Other interest income and similar income
103
96
Total interest and similar income
5,376
4,645
1. Includes a debit of \u20ac 618 million (2023: a debit of \u20ac 607 million) transferred from other comprehensive income in respect of cash flow hedges.
5\u00a0 Interest and similar expense
2024
2023
\u20ac m
\u20ac m
Interest on customer accounts1
468
175
Interest on deposits by central banks and banks
35
19
Interest on securities financing
25
23
Interest on debt securities in issue
540
436
Interest on lease liabilities
9
9
Interest on subordinated liabilities and other capital instruments
111
97
Interest expense on financial liabilities
1,188
759
Negative interest on financial assets2
2
2
Interest expense calculated using the effective interest rate method
1,190
761
Non-trading derivatives (not in hedge accounting relationships - economic hedges)
57
43
Other interest and similar expense
57
43
Total interest and similar expense
1,247
804
1. Includes a credit of \u20ac 49 million (2023: a credit of \u20ac 42 million) transferred from other comprehensive income in respect of cash flow hedges.
2. The Group presents interest resulting from negative effective interest rates on financial assets as interest expense rather than as offset against interest income.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-601": { "value": "
4\u00a0 Interest and similar income
2024
2023
\u20ac m
\u20ac m
Interest on loans and advances to customers at amortised cost1
2,715
2,295
Interest on loans and advances to banks at amortised cost
1,445
1,267
Interest on securities financing at amortised cost
271
273
Interest on investment securities
842
714
Interest income calculated using the effective interest rate method
5,273
4,549
Interest income on finance leases and hire purchase contracts
94
80
Interest income on financial assets at FVTPL
9
16
Other interest income and similar income
103
96
Total interest and similar income
5,376
4,645
1. Includes a debit of \u20ac 618 million (2023: a debit of \u20ac 607 million) transferred from other comprehensive income in respect of cash flow hedges.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-600": { "value": "
4\u00a0 Interest and similar income
2024
2023
\u20ac m
\u20ac m
Interest on loans and advances to customers at amortised cost1
2,715
2,295
Interest on loans and advances to banks at amortised cost
1,445
1,267
Interest on securities financing at amortised cost
271
273
Interest on investment securities
842
714
Interest income calculated using the effective interest rate method
5,273
4,549
Interest income on finance leases and hire purchase contracts
94
80
Interest income on financial assets at FVTPL
9
16
Other interest income and similar income
103
96
Total interest and similar income
5,376
4,645
1. Includes a debit of \u20ac 618 million (2023: a debit of \u20ac 607 million) transferred from other comprehensive income in respect of cash flow hedges.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-599": { "value": "
4\u00a0 Interest and similar income
2024
2023
\u20ac m
\u20ac m
Interest on loans and advances to customers at amortised cost1
2,715
2,295
Interest on loans and advances to banks at amortised cost
1,445
1,267
Interest on securities financing at amortised cost
271
273
Interest on investment securities
842
714
Interest income calculated using the effective interest rate method
5,273
4,549
Interest income on finance leases and hire purchase contracts
94
80
Interest income on financial assets at FVTPL
9
16
Other interest income and similar income
103
96
Total interest and similar income
5,376
4,645
1. Includes a debit of \u20ac 618 million (2023: a debit of \u20ac 607 million) transferred from other comprehensive income in respect of cash flow hedges.
5\u00a0 Interest and similar expense
2024
2023
\u20ac m
\u20ac m
Interest on customer accounts1
468
175
Interest on deposits by central banks and banks
35
19
Interest on securities financing
25
23
Interest on debt securities in issue
540
436
Interest on lease liabilities
9
9
Interest on subordinated liabilities and other capital instruments
111
97
Interest expense on financial liabilities
1,188
759
Negative interest on financial assets2
2
2
Interest expense calculated using the effective interest rate method
1,190
761
Non-trading derivatives (not in hedge accounting relationships - economic hedges)
57
43
Other interest and similar expense
57
43
Total interest and similar expense
1,247
804
1. Includes a credit of \u20ac 49 million (2023: a credit of \u20ac 42 million) transferred from other comprehensive income in respect of cash flow hedges.
2. The Group presents interest resulting from negative effective interest rates on financial assets as interest expense rather than as offset against interest income.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-604": { "value": "
5\u00a0 Interest and similar expense
2024
2023
\u20ac m
\u20ac m
Interest on customer accounts1
468
175
Interest on deposits by central banks and banks
35
19
Interest on securities financing
25
23
Interest on debt securities in issue
540
436
Interest on lease liabilities
9
9
Interest on subordinated liabilities and other capital instruments
111
97
Interest expense on financial liabilities
1,188
759
Negative interest on financial assets2
2
2
Interest expense calculated using the effective interest rate method
1,190
761
Non-trading derivatives (not in hedge accounting relationships - economic hedges)
57
43
Other interest and similar expense
57
43
Total interest and similar expense
1,247
804
1. Includes a credit of \u20ac 49 million (2023: a credit of \u20ac 42 million) transferred from other comprehensive income in respect of cash flow hedges.
2. The Group presents interest resulting from negative effective interest rates on financial assets as interest expense rather than as offset against interest income.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-603": { "value": "
5\u00a0 Interest and similar expense
2024
2023
\u20ac m
\u20ac m
Interest on customer accounts1
468
175
Interest on deposits by central banks and banks
35
19
Interest on securities financing
25
23
Interest on debt securities in issue
540
436
Interest on lease liabilities
9
9
Interest on subordinated liabilities and other capital instruments
111
97
Interest expense on financial liabilities
1,188
759
Negative interest on financial assets2
2
2
Interest expense calculated using the effective interest rate method
1,190
761
Non-trading derivatives (not in hedge accounting relationships - economic hedges)
57
43
Other interest and similar expense
57
43
Total interest and similar expense
1,247
804
1. Includes a credit of \u20ac 49 million (2023: a credit of \u20ac 42 million) transferred from other comprehensive income in respect of cash flow hedges.
2. The Group presents interest resulting from negative effective interest rates on financial assets as interest expense rather than as offset against interest income.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-605": { "value": "
6\u00a0 Net trading income
2024
2023
\u20ac m
\u20ac m
Foreign exchange contracts
23
(3)
Interest rate contracts and debt securities1
12
6
Credit derivative contracts
(1)
(3)
Equity investments, index contracts and warrants
(8)
(13)
Forward contract to acquire loans2
27
223
Virtual corporate power purchase agreement
(3)
\u2014
Total net trading income
50
210
1. The total hedging ineffectiveness on cash flow hedges reflected in the consolidated income statement amounted to a loss of \u20ac 6 million (2023: Nil).
2. Comprises a gain of \u20ac 27 million (2023: gain of \u20ac 203 million) relating to the forward contract to acquire Ulster Bank tracker (and linked) mortgages. 2023 also
includes a gain of \u20ac 20 million relating to the forward contract to acquire Ulster Bank corporate and commercial loans. See note 43 for further information.", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-607": { "value": "
7\u00a0 Net gain on other financial assets measured at FVTPL
2024
2023
\u20ac m
\u20ac m
Loans and advances to customers1
12
3
Investment securities \u2013 equity
70
27
Total net gain on other financial assets measured at FVTPL
82
30
1. Excludes interest income (note 4).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-606": { "value": "
7\u00a0 Net gain on other financial assets measured at FVTPL
2024
2023
\u20ac m
\u20ac m
Loans and advances to customers1
12
3
Investment securities \u2013 equity
70
27
Total net gain on other financial assets measured at FVTPL
82
30
1. Excludes interest income (note 4).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-610": { "value": "
9\u00a0 Other (expense)/income
2024
2023
\u20ac m
\u20ac m
Loss on disposal of investment securities at FVOCI \u2013 debt
(77)
(22)
Gain on termination of hedging swaps1
41
14
Dividend income
1
2
Miscellaneous operating income
19
23
Total other (expense)/income
(16)
17
1. The majority of the gain on termination of hedging swaps relates to the disposal of debt securities at FVOCI. In addition, it includes Nil (2023: a debit of \u20ac 8 million)
transferred from other comprehensive income in respect of cash flow hedges.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-609": { "value": "
9\u00a0 Other (expense)/income
2024
2023
\u20ac m
\u20ac m
Loss on disposal of investment securities at FVOCI \u2013 debt
(77)
(22)
Gain on termination of hedging swaps1
41
14
Dividend income
1
2
Miscellaneous operating income
19
23
Total other (expense)/income
(16)
17
1. The majority of the gain on termination of hedging swaps relates to the disposal of debt securities at FVOCI. In addition, it includes Nil (2023: a debit of \u20ac 8 million)
transferred from other comprehensive income in respect of cash flow hedges.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-608": { "value": "
9\u00a0 Other (expense)/income
2024
2023
\u20ac m
\u20ac m
Loss on disposal of investment securities at FVOCI \u2013 debt
(77)
(22)
Gain on termination of hedging swaps1
41
14
Dividend income
1
2
Miscellaneous operating income
19
23
Total other (expense)/income
(16)
17
1. The majority of the gain on termination of hedging swaps relates to the disposal of debt securities at FVOCI. In addition, it includes Nil (2023: a debit of \u20ac 8 million)
transferred from other comprehensive income in respect of cash flow hedges.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-613": { "value": "
10\u00a0 Operating expenses
2024
2023
\u20ac m
\u20ac m
Personnel expenses:
Wages and salaries
777
711
Termination benefits1
19
7
Retirement benefits2
110
105
Social security costs
83
79
Other personnel expenses
29
36
1,018
938
Less: staff costs capitalised to intangible assets
(34)
(26)
Total personnel expenses
984
912
General and administrative expenses
720
688
Customer redress3
52
62
772
750
Bank levies and regulatory fees
138
185
Total operating expenses
1,894
1,847
1. Represents charges for voluntary severance programmes.
2. Comprises a defined contribution charge of \u20ac 96 million (2023: a charge of \u20ac 89 million), a charge of \u20ac 3 million in relation to defined benefit expenses (2023: a
charge of \u20ac 5 million), and a long term disability payments/death in service benefit charge of \u20ac 11 million (2023: a charge of \u20ac 11 million). For details of retirement
benefits, see note 27.
3. The Group recognised a net charge of \u20ac 52 million (2023: \u20ac 62 million) for customer redress and associated costs in respect of legacy matters. Refer to note 1 for
further information about the change in presentation for certain notes to the financial statements and note 34 for further information on customer redress.
The average number of employees for 2024 and 2023 is set out in note 47.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-612": { "value": "
10\u00a0 Operating expenses
2024
2023
\u20ac m
\u20ac m
Personnel expenses:
Wages and salaries
777
711
Termination benefits1
19
7
Retirement benefits2
110
105
Social security costs
83
79
Other personnel expenses
29
36
1,018
938
Less: staff costs capitalised to intangible assets
(34)
(26)
Total personnel expenses
984
912
General and administrative expenses
720
688
Customer redress3
52
62
772
750
Bank levies and regulatory fees
138
185
Total operating expenses
1,894
1,847
1. Represents charges for voluntary severance programmes.
2. Comprises a defined contribution charge of \u20ac 96 million (2023: a charge of \u20ac 89 million), a charge of \u20ac 3 million in relation to defined benefit expenses (2023: a
charge of \u20ac 5 million), and a long term disability payments/death in service benefit charge of \u20ac 11 million (2023: a charge of \u20ac 11 million). For details of retirement
benefits, see note 27.
3. The Group recognised a net charge of \u20ac 52 million (2023: \u20ac 62 million) for customer redress and associated costs in respect of legacy matters. Refer to note 1 for
further information about the change in presentation for certain notes to the financial statements and note 34 for further information on customer redress.
The average number of employees for 2024 and 2023 is set out in note 47.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-611": { "value": "
10\u00a0 Operating expenses
2024
2023
\u20ac m
\u20ac m
Personnel expenses:
Wages and salaries
777
711
Termination benefits1
19
7
Retirement benefits2
110
105
Social security costs
83
79
Other personnel expenses
29
36
1,018
938
Less: staff costs capitalised to intangible assets
(34)
(26)
Total personnel expenses
984
912
General and administrative expenses
720
688
Customer redress3
52
62
772
750
Bank levies and regulatory fees
138
185
Total operating expenses
1,894
1,847
1. Represents charges for voluntary severance programmes.
2. Comprises a defined contribution charge of \u20ac 96 million (2023: a charge of \u20ac 89 million), a charge of \u20ac 3 million in relation to defined benefit expenses (2023: a
charge of \u20ac 5 million), and a long term disability payments/death in service benefit charge of \u20ac 11 million (2023: a charge of \u20ac 11 million). For details of retirement
benefits, see note 27.
3. The Group recognised a net charge of \u20ac 52 million (2023: \u20ac 62 million) for customer redress and associated costs in respect of legacy matters. Refer to note 1 for
further information about the change in presentation for certain notes to the financial statements and note 34 for further information on customer redress.
The average number of employees for 2024 and 2023 is set out in note 47.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-614": { "value": "
12\u00a0 Auditor's remuneration
The disclosure of auditor\u2019s remuneration is in accordance with Section 322 of the Companies Act 2014. This mandates disclosure of remuneration
paid/payable to the Group Auditor only (PricewaterhouseCoopers), for services relating to the audit of the Group and relevant subsidiary financial
statements in the categories set out below.
2024
2023
Ireland
Overseas
Total
Ireland
Overseas
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Auditor\u2019s remuneration (excluding VAT):
Audit of Group financial statements
3.9
0.9
4.8
2.9
0.9
3.8
Other assurance services1
1.5
0.1
1.6
0.7
0.1
0.8
Other non-audit services
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total auditor\u2019s remuneration
5.4
1.0
6.4
3.6
1.0
4.6
1. Represents other assurance services provided by the Group\u2019s auditor for CSRD (2024 only), letters of comfort, other ESG reporting and other regulatory reporting.
The amounts in the table above relate to fees payable to PricewaterhouseCoopers, split between those payable to the statutory auditors,
PricewaterhouseCoopers in Ireland and fees paid to overseas auditors, PricewaterhouseCoopers LLP in the UK.
Other assurance services include remuneration for additional assurance issued by the firms outside of the audit of the statutory financial statements
of the Group and its subsidiaries. This remuneration includes assignments where the Auditor, in Ireland, provides assurance to third parties.
The Group policy on the provision of non-audit services to the parent and its subsidiary companies includes the prohibition on the provision of
certain services and the pre-approval by the Board Audit Committee of the engagement of the Auditor in other instances.
The Board Audit Committee has reviewed the level of non-audit services remuneration and is satisfied that it has not affected the independence of
the Auditor. It is Group policy to subject all large consultancy assignments to competitive tender, where appropriate.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-616": { "value": "
14\u00a0 Taxation
2024
2023
\u20ac m
\u20ac m
Current tax
Corporation tax in Ireland
Current tax on income for the year
(8)
(6)
Adjustments in respect of prior years
1
\u2014
(7)
(6)
Foreign tax
Current tax on income for the year
(52)
(71)
Adjustments in respect of prior years
(1)
\u2014
(53)
(71)
Current tax charge for the year
(60)
(77)
Deferred tax
Origination and reversal of temporary differences
4
1
Adjustments in respect of prior years
(1)
2
Recognition of deferred tax assets in respect of current and prior period losses1
25
\u2014
Reduction in carrying value of deferred tax assets in respect of carried forward losses
(319)
(262)
Deferred tax charge for the year
(291)
(259)
Total tax charge for the year
(351)
(336)
Effective tax rate
13.0%
14.0%
1. During the year the Group recognised \u20ac 25 million (2023: Nil) in respect of tax losses within UK and US overseas branches.
Factors affecting the effective tax rate
The following table sets out the difference between the tax charge that would result from applying the standard corporation tax rate in Ireland of
12.5% and the actual tax charge for the year:
2024
2023
\u20ac m
%
\u20ac m
%
Profit before tax
2,702
2,394
Tax charge at standard corporation tax rate in Ireland of 12.5%
(338)
12.5
(299)
12.5
Effects of:
Foreign profits taxed at other rates
(34)
1.3
(40)
1.7
Expenses not deductible for tax purposes
(20)
0.6
(11)
0.4
Exempted income, income at reduced rates and tax credits
1
\u2014
(1)
0.1
Share of results of investments accounted for using the equity method shown post tax in the
income statement
5
(0.2)
3
(0.2)
Income taxed at higher tax rates
(7)
0.3
(12)
0.5
Tax legislation on equity distributions
11
(0.4)
8
(0.3)
Deferred tax assets not recognised/reversal of amounts previously not recognised
30
(1.1)
13
(0.5)
Other tax adjustments
1
\u2014
1
(0.1)
Adjustments to tax charge in respect of prior years
\u2014
\u2014
2
(0.1)
Tax charge
(351)
13.0
(336)
14.0
The Group is within the scope of the global minimum top-up tax under Pillar Two tax legislation from 1 January 2024, however, the Group is not
liable to any additional top-up tax expense for the period in Ireland or any of the other jurisdictions in which it operates. This is because the Pillar
Two effective tax rate in each of those jurisdictions is above 15% or transitional exemptions apply.
14\u00a0 Taxation continued
Recognised within other comprehensive income in the Consolidated Statement of Comprehensive Income
2024
2023
Gross
Tax
Net
Gross
Tax
Net
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Retirement benefit schemes
Remeasurement of defined benefit assets/(liabilities)
(18)
5
(13)
(2)
\u2014
(2)
Total
(18)
5
(13)
(2)
\u2014
(2)
Foreign currency translation reserves
Amounts reclassified from the foreign currency translation reserves to the income
statement as a reclassification adjustment:
\u2013 amounts for which hedge accounting had previously been used, but for which
the hedged future cash flows are no longer expected to occur
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2013 amounts that have been transferred because the hedged item has affected the
income statement
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Recognised in other comprehensive income:
\u2013 Net losses on net investment hedges
(66)
8
(58)
(28)
3
(25)
\u2013 Net exchange differences on translation of foreign operations
127
\u2014
127
82
\u2014
82
Total
61
8
69
54
3
57
Cash flow hedging reserves
Amounts reclassified from the cash flow hedging reserves to the income
statement as a reclassification adjustment:
\u2013 amounts for which hedge accounting had previously been used, but for which
the hedged future cash flows are no longer expected to occur
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2013 amounts that have been transferred because the hedged item has affected the
income statement
569
(71)
498
573
(72)
501
Hedging (losses)/gains recognised in other comprehensive income
(382)
51
(331)
791
(110)
681
Total
187
(20)
167
1,364
(182)
1,182
Investment debt securities at FVOCI reserves
Fair value losses transferred to income statement
77
(4)
73
22
(3)
19
Fair value losses recognised in other comprehensive income
(148)
18
(130)
(68)
8
(60)
Total
(71)
14
(57)
(46)
5
(41)
26\u00a0 Deferred taxation
2024
2023
\u20ac m
\u20ac m
Deferred tax assets:
Unutilised tax losses
2,203
2,474
Cash flow hedges
73
97
Transition to IFRS 9
3
4
Assets used in the business
47
17
Retirement benefits
3
4
Assets leased to customers
15
16
Investment securities
15
\u2014
Other
3
3
Total gross deferred tax assets
2,362
2,615
Deferred tax liabilities:
Cash flow hedges
(7)
(11)
Retirement benefits
(6)
(6)
Assets used in the business
(51)
(22)
Acquisition of subsidiary
(1)
(2)
Other
(8)
(16)
Total gross deferred tax liabilities
(73)
(57)
Net deferred tax assets
2,289
2,558
Represented on the statement of financial position:
Deferred tax assets
2,303
2,581
Deferred tax liabilities
(14)
(23)
2,289
2,558
For each of the years ended 31 December 2024 and 2023, full provision has been made for capital allowances and other temporary differences.
Analysis of movements in deferred taxation
2024
2023
\u20ac m
\u20ac m
At 1 January
2,558
3,002
Exchange translation and other adjustments
15
(11)
Deferred tax through other comprehensive income (note 14)
7
(174)
Income statement (note 14)
(291)
(259)
At 31 December
2,289
2,558
With regard to the Group\u2019s deferred tax asset for unutilised losses, during 2024 the Group recognised a net charge to the income statement of
\u20ac 294 million (2023: \u20ac 262 million) and an increase in the carrying value of \u20ac 23 million (2023: \u20ac 8 million) in relation to exchange translations and
other adjustments. As a result, the amount of recognised deferred tax assets arising from unutilised tax losses amounted to \u20ac 2,203 million
(2023: \u20ac\u00a02,474 million) of which \u20ac 1,995 million (2023: \u20ac 2,289 million) relates to Irish tax losses, \u20ac 191 million (2023: \u20ac 185 million) relates to UK
tax losses and \u20ac 17 million (2023: Nil) relates to US tax losses. Additional commentary on the basis of recognition of deferred tax assets on unused
tax losses is included in note 2.
Temporary differences recognised in other comprehensive income consist of deferred tax on financial assets at FVOCI, cash flow hedges and
actuarial gains/losses on retirement benefit schemes. Temporary differences recognised in the income statement consist of provisions for expected
credit losses on financial instruments, amortised income, assets leased to customers, and assets used in the course of the business.
Net deferred tax assets at 31 December 2024 of \u20ac 2,076 million (2023: \u20ac 2,361 million) are expected to be recovered after more than 12 months.
For the Group\u2019s principal UK subsidiary, the Group has concluded that the recognition of deferred tax assets be limited to the amount projected to
be realised within a time period of 15 years. This is the timescale within which the Group believes that it can assess the likelihood of its profits
arising as being more likely than not. The deferred tax asset for unutilised tax losses in the principal UK subsidiary amounts to \u00a3 152 million at
31\u00a0December 2024 (2023: \u00a3 160 million).
For certain other subsidiaries and branches, the Group has concluded that it is more likely than not that there will be insufficient profits to support
full recognition of deferred tax assets. The Group has not recognised deferred tax assets in respect of: Irish tax on unused tax losses at
31\u00a0December 2024 of \u20ac 155 million (2023: \u20ac 161 million); overseas tax (UK and USA) on unused tax losses of \u20ac\u00a03,078 million (2023: \u20ac 3,058
million); and\u00a0foreign tax credits for Irish tax purposes of \u20ac 19 million (2023: \u20ac 12 million). Of these tax losses totalling \u20ac\u00a03,233\u00a0million for which no
deferred tax is\u00a0recognised: \u20ac 14 million expires in 2034; and \u20ac 6 million in 2035.
The aggregate amount of temporary differences associated with investments in subsidiaries, branches and associates for which deferred tax
liabilities have not been recognised amounted to Nil (2023: Nil). Deferred tax recognised directly in equity amounted to Nil (2023: Nil)", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-615": { "value": "
14\u00a0 Taxation
2024
2023
\u20ac m
\u20ac m
Current tax
Corporation tax in Ireland
Current tax on income for the year
(8)
(6)
Adjustments in respect of prior years
1
\u2014
(7)
(6)
Foreign tax
Current tax on income for the year
(52)
(71)
Adjustments in respect of prior years
(1)
\u2014
(53)
(71)
Current tax charge for the year
(60)
(77)
Deferred tax
Origination and reversal of temporary differences
4
1
Adjustments in respect of prior years
(1)
2
Recognition of deferred tax assets in respect of current and prior period losses1
25
\u2014
Reduction in carrying value of deferred tax assets in respect of carried forward losses
(319)
(262)
Deferred tax charge for the year
(291)
(259)
Total tax charge for the year
(351)
(336)
Effective tax rate
13.0%
14.0%
1. During the year the Group recognised \u20ac 25 million (2023: Nil) in respect of tax losses within UK and US overseas branches.
Factors affecting the effective tax rate
The following table sets out the difference between the tax charge that would result from applying the standard corporation tax rate in Ireland of
12.5% and the actual tax charge for the year:
2024
2023
\u20ac m
%
\u20ac m
%
Profit before tax
2,702
2,394
Tax charge at standard corporation tax rate in Ireland of 12.5%
(338)
12.5
(299)
12.5
Effects of:
Foreign profits taxed at other rates
(34)
1.3
(40)
1.7
Expenses not deductible for tax purposes
(20)
0.6
(11)
0.4
Exempted income, income at reduced rates and tax credits
1
\u2014
(1)
0.1
Share of results of investments accounted for using the equity method shown post tax in the
income statement
5
(0.2)
3
(0.2)
Income taxed at higher tax rates
(7)
0.3
(12)
0.5
Tax legislation on equity distributions
11
(0.4)
8
(0.3)
Deferred tax assets not recognised/reversal of amounts previously not recognised
30
(1.1)
13
(0.5)
Other tax adjustments
1
\u2014
1
(0.1)
Adjustments to tax charge in respect of prior years
\u2014
\u2014
2
(0.1)
Tax charge
(351)
13.0
(336)
14.0
The Group is within the scope of the global minimum top-up tax under Pillar Two tax legislation from 1 January 2024, however, the Group is not
liable to any additional top-up tax expense for the period in Ireland or any of the other jurisdictions in which it operates. This is because the Pillar
Two effective tax rate in each of those jurisdictions is above 15% or transitional exemptions apply.
14\u00a0 Taxation continued
Recognised within other comprehensive income in the Consolidated Statement of Comprehensive Income
2024
2023
Gross
Tax
Net
Gross
Tax
Net
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Retirement benefit schemes
Remeasurement of defined benefit assets/(liabilities)
(18)
5
(13)
(2)
\u2014
(2)
Total
(18)
5
(13)
(2)
\u2014
(2)
Foreign currency translation reserves
Amounts reclassified from the foreign currency translation reserves to the income
statement as a reclassification adjustment:
\u2013 amounts for which hedge accounting had previously been used, but for which
the hedged future cash flows are no longer expected to occur
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2013 amounts that have been transferred because the hedged item has affected the
income statement
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Recognised in other comprehensive income:
\u2013 Net losses on net investment hedges
(66)
8
(58)
(28)
3
(25)
\u2013 Net exchange differences on translation of foreign operations
127
\u2014
127
82
\u2014
82
Total
61
8
69
54
3
57
Cash flow hedging reserves
Amounts reclassified from the cash flow hedging reserves to the income
statement as a reclassification adjustment:
\u2013 amounts for which hedge accounting had previously been used, but for which
the hedged future cash flows are no longer expected to occur
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2013 amounts that have been transferred because the hedged item has affected the
income statement
569
(71)
498
573
(72)
501
Hedging (losses)/gains recognised in other comprehensive income
(382)
51
(331)
791
(110)
681
Total
187
(20)
167
1,364
(182)
1,182
Investment debt securities at FVOCI reserves
Fair value losses transferred to income statement
77
(4)
73
22
(3)
19
Fair value losses recognised in other comprehensive income
(148)
18
(130)
(68)
8
(60)
Total
(71)
14
(57)
(46)
5
(41)
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-619": { "value": "
2024
2023
15 Trading portfolio
Trading
portfolio
assets
Trading
portfolio
liabilities
Trading
portfolio
assets
Trading
portfolio
liabilities
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Equity securities
15
(5)
9
(5)
Debt securities
121
(257)
84
(134)
Total
136
(262)
93
(139)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-618": { "value": "
2024
2023
15 Trading portfolio
Trading
portfolio
assets
Trading
portfolio
liabilities
Trading
portfolio
assets
Trading
portfolio
liabilities
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Equity securities
15
(5)
9
(5)
Debt securities
121
(257)
84
(134)
Total
136
(262)
93
(139)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-617": { "value": "
2024
2023
15 Trading portfolio
Trading
portfolio
assets
Trading
portfolio
liabilities
Trading
portfolio
assets
Trading
portfolio
liabilities
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Equity securities
15
(5)
9
(5)
Debt securities
121
(257)
84
(134)
Total
136
(262)
93
(139)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-620": { "value": "
16\u00a0 Derivative financial instruments
Derivatives are entered into to service customer requirements, to manage the Group\u2019s interest rate, exchange rate, equity and credit exposures
and for trading purposes. Derivative instruments are contractual agreements whose value is derived from price movements in underlying assets,
interest rates, foreign exchange rates or indices.
Market risk is the exposure to potential loss through holding interest rate, exchange rate and equity positions in the face of absolute and relative
price movements, interest rate volatility, movements in exchange rates and shifts in liquidity. Credit risk is the exposure to loss should the
counterparty to a financial instrument fail to perform in accordance with the terms of the contract.
Credit risk in derivative contracts is the risk that the Group\u2019s counterparty in the contract defaults prior to maturity at a time when the Group has
a\u00a0claim on the counterparty under the contract (i.e. contracts with a positive fair value). The Group would then have to replace the contract at the
current market rate, which may result in a loss. For risk management purposes, consideration is taken of the fact that not all counterparties to
derivative positions are expected to default at the point where the Group is most exposed to them. While notional principal amounts are used to
express the volume of derivative transactions, the amounts subject to credit risk are much lower because derivative contracts typically involve
payments based on the net differences between specified prices or rates.
The following table presents the notional principal amount of interest rate, exchange rate, equity, credit and commodity derivative contracts
together with the positive and negative fair values attaching to those contracts at 31 December 2024 and 2023 :
2024
2023
Notional
principal
amount
Fair values
Notional
principal
amount
Fair values
Assets
Liabilities
Assets
Liabilities
Derivative financial instruments
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate contracts
86,671
2,109
(1,689)
86,899
2,351
(1,869)
Exchange rate contracts
8,685
35
(112)
6,287
14
(29)
Equity contracts
41
\u2014
\u2014
92
\u2014
(1)
Credit derivatives
83
\u2014
(3)
83
\u2014
(3)
Forward contracts to acquire loans1
\u2014
\u2014
\u2014
1,047
12
\u2014
Virtual corporate power purchase agreement
2
\u2014
(3)
\u2014
\u2014
\u2014
Total
95,482
2,144
(1,807)
94,408
2,377
(1,902)
1. Relates to a forward contract to acquire tracker (and linked) mortgages from Ulster Bank. See note 43 for further information.
The Group uses the same credit control and risk management policies in undertaking all off-balance sheet commitments as it does for on-balance
sheet lending including counterparty credit approval, limit setting and monitoring procedures. In addition, derivative instruments are subject to the
market risk policy and control framework as described in the \u2018Risk management\u2019 section of this report.
The Group has the following concentration of exposures in respect of notional principal amount and positive fair value of derivative financial
instruments. The concentrations are based primarily on the location of the office recording the transaction.
Notional principal
amount
Positive fair value
2024
2023
2024
2023
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Ireland
91,221
90,975
2,064
2,261
United Kingdom
4,174
3,341
78
113
United States of America
87
92
2
3
Total
95,482
94,408
2,144
2,377
Trading book activities
The Group maintains trading positions in a variety of financial instruments including derivatives. These derivative financial instruments include
interest rate, foreign exchange, equity and credit derivatives. Most of these positions arise as a result of activity generated by corporate customers
while the remainder represent trading decisions of the Group\u2019s derivative and foreign exchange traders with a view to generating incremental income.
All trading activity is conducted within risk limits approved by the Board. Systems are in place which measure risks and profitability associated with
derivative trading positions as market movements occur. Independent risk control units monitor these risks.
Banking book activities
In addition to meeting customer needs, the Group\u2019s principal objective in holding or transacting derivatives is the management of interest rate and
foreign exchange risks which arise within the banking book through the operations of the Group as outlined below. Market risk within the banking
book is also controlled through limits approved by the Board and monitored by an independent second line risk function.
The operations of the Group are exposed to interest rate risk arising from the fact that assets and liabilities mature or reprice at different times or
in\u00a0differing amounts. Derivatives are used to modify the repricing or maturity characteristics of assets and liabilities in a cost-efficient manner. This
flexibility helps the Group to achieve interest rate risk management objectives. Similarly, foreign exchange derivatives can be used to hedge the
Group\u2019s exposure to foreign exchange risk.
16\u00a0 Derivative financial instruments continued
Banking book activities continued
The fair values of derivatives fluctuate as the underlying market interest rates or foreign exchange rates change. If the derivatives are purchased
or sold as hedges of statement of financial position items, the change in fair value of the derivatives will generally be offset by the change in fair
value of the hedged items.
To achieve its risk management objectives, the Group uses a combination of derivative financial instruments, particularly interest rate swaps, cross
currency interest rate swaps, futures, options and currency swaps, as well as other contracts. The risk that counterparties to derivative contracts
(both trading and banking book) might default on their obligations is monitored on an ongoing basis. The level of credit risk is minimised by dealing
with counterparties of good credit standing, by the use of Credit Support Annexes and ISDA Netting Agreements and increased clearing of
derivatives through Central Clearing Counterparties (\u2018CCP\u2019s\u2019). As the traded instruments are recognised at fair value, any changes in fair value
directly affect reported income for a given period.
The following table shows the notional principal amount and the fair value of derivative financial instruments analysed by product and purpose at
31 December 2024 and 2023. A description of how the fair values of derivatives are determined is set out in note 43.
2024
2023
Notional
principal
amount
Fair values
Notional
principal
amount
Fair values
Assets
Liabilities
Assets
Liabilities
Derivatives held for trading
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate derivatives
Interest rate swaps \u2013 over-the-counter (\u2018OTC\u2019)
5,700
107
(321)
5,199
138
(351)
Interest rate swaps \u2013 OTC central clearing
5,111
274
(36)
4,650
278
(49)
Cross-currency interest rate swaps \u2013 OTC
\u2014
\u2014
\u2014
645
3
\u2014
Interest rate options bought and sold \u2013 OTC
3,701
9
(10)
3,493
14
(18)
Interest rate futures bought and sold \u2013 exchange traded
221
\u2014
\u2014
85
\u2014
\u2014
Total interest rate derivatives
14,733
390
(367)
14,072
433
(418)
Foreign exchange derivatives
Foreign exchange contracts \u2013 OTC
7,246
35
(88)
4,783
12
(26)
Total foreign exchange derivatives
7,246
35
(88)
4,783
12
(26)
Equity, credit and other derivatives
Equity total return swaps \u2013 OTC
41
\u2014
\u2014
92
\u2014
(1)
Credit derivatives \u2013 OTC central clearing
83
\u2014
(3)
83
\u2014
(3)
Forward contracts to acquire loans1
\u2014
\u2014
\u2014
1,047
12
\u2014
Virtual corporate power purchase agreement
2
\u2014
(3)
\u2014
\u2014
\u2014
Total equity, credit and other derivatives
126
\u2014
(6)
1,222
12
(4)
Total derivatives held for trading
22,105
425
(461)
20,077
457
(448)
Derivatives held for hedging
Derivatives designated as fair value hedges
Interest rate swaps \u2013 OTC
183
5
\u2014
422
9
(1)
Interest rate swaps \u2013 OTC central clearing
29,783
1,050
(363)
24,015
1,228
(341)
Total derivatives designated as fair value hedges
29,966
1,055
(363)
24,437
1,237
(342)
Derivatives designated as cash flow hedges
Interest rate swaps \u2013 OTC
222
\u2014
(5)
255
\u2014
(12)
Interest rate swaps \u2013 OTC central clearing
41,110
664
(915)
48,135
681
(1,097)
Cross currency interest rate swaps - OTC
640
\u2014
(39)
\u2014
\u2014
\u2014
Total derivatives designated as cash flow hedges
41,972
664
(959)
48,390
681
(1,109)
Derivatives designated as net investment hedges
Forward exchange contracts \u2013 OTC
1,439
\u2014
(24)
1,504
2
(3)
Total derivatives designated as net investment hedges
1,439
\u2014
(24)
1,504
2
(3)
Total derivatives held for hedging
73,377
1,719
(1,346)
74,331
1,920
(1,454)
Total derivative financial instruments
95,482
2,144
(1,807)
94,408
2,377
(1,902)
1. Relates to a forward contract to acquire tracker (and linked) mortgages from Ulster Bank. See note 43 for further information.
16\u00a0 Derivative financial instruments continued
Fair value hedges
Fair value hedges are entered into to hedge the exposure to changes in the fair value of recognised assets or liabilities arising from changes in
interest rates, primarily, debt securities and fixed rate liabilities. The fair values of financial instruments are set out in note 43.
The net mark to market on fair value hedging derivatives, excluding accrual and risk adjustments at 31 December 2024 is positive \u20ac 594 million
(2023: positive \u20ac 764 million) and the net mark to market on the related hedged items at 31 December 2024 is negative \u20ac 576 million (2023:
negative \u20ac 748 million).
Offsetting of derivative financial assets and financial liabilities
Derivative financial instruments are shown on the statement of financial position at their fair value. Those with a positive fair value are reported
as\u00a0assets and those with a negative fair value are reported as liabilities. Details on offsetting financial assets and financial liabilities are set out in
note 38.
Nominal values and average interest rates by residual maturity
At 31 December 2024 and 2023, the Group held the following hedging instruments of interest rate risk and foreign exchange rate risk in fair value,
cash flow and net investment hedges respectively. In 2024 the Group revised the maturity analysis disclosure to better align it with the current
maturity profile of the Group\u2019s hedging instruments. The related comparatives for 2023 have been re-presented.
2024
Up to 1 year
1 to 2 years
2 to 5 years
5 years +
Total
Fair value hedges \u2013 Interest rate swaps
Assets
Hedges of investment securities
Nominal principal amount (\u20ac m)
785
1,617
5,949
7,803
16,154
Average interest rate (%)1
0.94
0.77
1.02
1.85
1.39
Hedges of customer loans
Nominal principal amount (\u20ac m)
\u2014
\u2014
\u2014
15
15
Average interest rate (%)1
\u2014
\u2014
\u2014
2.59
2.59
Liabilities
Hedges of debt securities in issue
Nominal principal amount (\u20ac m)
1,972
750
3,468
1,732
7,922
Average interest rate (%)1
4.73
0.50
4.74
5.59
4.52
Hedges of subordinated debt
Nominal principal amount (\u20ac m)
\u2014
1,000
\u2014
650
1,650
Average interest rate (%)1
\u2014
2.88
\u2014
4.63
3.56
Hedges of customer deposits
Nominal principal amount (\u20ac m)
\u2014
\u2014
2,615
1,610
4,225
Average interest rate (%)1
\u2014
\u2014
2.59
2.47
2.55
Total nominal amount of fair value hedges \u2013 Interest rate swaps
2,757
3,367
12,032
11,810
29,966
Cash flow hedges \u2013 Interest rate swaps2
Hedges of financial assets
Nominal principal amount (\u20ac m)
4,430
10,627
7,182
17,526
39,765
Average interest rate (%)3
3.06
3.27
1.78
2.34
2.57
Hedges of financial liabilities
Nominal principal amount (\u20ac m)
213
459
962
573
2,207
Average interest rate (%)3
2.29
2.39
2.61
2.76
2.57
Total nominal amount of cash flow hedges \u2013 Interest rate swaps
4,643
11,086
8,144
18,099
41,972
Net investment hedges \u2013 Forward exchange contracts
Nominal principal amount (\u20ac m)
1,231
208
\u2014
\u2014
1,439
Forward FX rate (%)4
0.85
0.87
\u2014
\u2014
0.85
1. Represents the fixed rate on the hedged item which is being swapped for a variable rate.
2. Includes interest rate swaps and cross currency swaps used to hedge interest rate risk on variable rate EUR/USD assets and liabilities.
3. This is the average interest rate on the fixed leg of swap agreements where the variable rate on the assets and liabilities in cash flow hedges is being swapped for
a\u00a0fixed rate. Pay fixed cash flow hedges are used to hedge the cash flows on variable rate liabilities and receive fixed cash flow hedges are used to\u00a0hedge the cash
flows on variable rate assets.
4. Being the forward FX rates on the hedging derivatives which are being used to hedge the Group\u2019s net investment in foreign operations.
16\u00a0 Derivative financial instruments continued
Nominal values and average interest rates by residual maturity continued
2023
Up to 1 year
1 to 2 years
2 to 5 years
5 years +
Total
Fair value hedges \u2013 Interest rate swaps
Assets
Hedges of investment securities
Nominal principal amount (\u20ac m)
931
913
7,430
5,134
14,408
Average interest rate (%)1
0.74
0.88
0.83
1.40
1.03
Hedges of customer loans
Nominal principal amount (\u20ac m)
\u2014
\u2014
\u2014
15
15
Average interest rate (%)1
\u2014
\u2014
\u2014
2.59
2.59
Liabilities
Hedges of debt securities in issue
Nominal principal amount (\u20ac m)
1,655
1,929
4,160
770
8,514
Average interest rate (%)1
2.90
4.66
3.95
5.25
4.02
Hedges of subordinated debt
Nominal principal amount (\u20ac m)
500
\u2014
1,000
\u2014
1,500
Average interest rate (%)1
1.88
\u2014
2.88
\u2014
2.54
Hedges of customer deposits
Nominal principal amount (\u20ac m)
\u2014
\u2014
\u2014
\u2014
\u2014
Average interest rate (%)1
\u2014
\u2014
\u2014
\u2014
\u2014
Total nominal amount of fair value hedges \u2013 Interest rate swaps
3,086
2,842
12,590
5,919
24,437
Cash flow hedges \u2013 Interest rate swaps2
Hedges of financial assets
Nominal principal amount (\u20ac m)
8,511
3,805
18,892
15,279
46,487
Average interest rate (%)3
2.19
2.44
2.61
2.26
2.40
Hedges of financial liabilities
Nominal principal amount (\u20ac m)
82
355
1,251
215
1,903
Average interest rate (%)3
0.81
2.32
2.07
3.36
2.21
Total nominal amount of cash flow hedges \u2013 Interest rate swaps
8,593
4,160
20,143
15,494
48,390
Net investment hedges \u2013 Forward exchange contracts
Nominal principal amount (\u20ac m)
1,504
\u2014
\u2014
\u2014
1,504
Forward FX rate (%)4
0.87
\u2014
\u2014
\u2014
0.87
1. Represents the fixed rate on the hedged item which is being swapped for a variable rate.
2. Includes interest rate swaps used to hedge interest rate risk.
3. This is the average interest rate on the fixed leg of swap agreements where the variable rate on the assets and liabilities in cash flow hedges is being swapped for
a\u00a0fixed rate. Pay fixed cash flow hedges are used to hedge the cash flows on variable rate liabilities and receive fixed cash flow hedges are used to\u00a0hedge the cash
flows on variable rate assets.
4. Being the forward FX rates on the hedging derivatives which are being used to hedge the Group\u2019s net investment in foreign operations.
16\u00a0 Derivative financial instruments continued
Fair value hedges of interest rate risk
The tables below set out the amounts relating to items designated as (a) hedging instruments and (b) hedged items in fair value hedges of interest
rate risk together with the related hedge ineffectiveness at 31 December 2024 and 2023:
2024
Nominal
amount of
hedging
instrument
Carrying amount of
hedging instrument2
Change in fair
value used for
calculating
hedge
ineffectiveness
for the year
Hedge
ineffectiveness
recognised in
the income
statement1
Assets
Liabilities
Hedging instrument1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate swaps hedging:
Investment securities
16,154
827
(270)
(372)
1
Debt securities in issue
7,922
132
(69)
67
(2)
Subordinated debt
1,650
30
(21)
64
1
Customer accounts
4,225
66
(2)
64
\u2014
Customer loans
15
\u2014
(1)
\u2014
\u2014
29,966
1,055
(363)
(177)
\u2014
2024
Line item in Statement of
Financial Position where hedged
item is included
Carrying amount
of hedged item
recognised in
Statement of
Financial Position
Accumulated amount of\u00a0fair
value hedge adjustments on
the hedged item included in
the carrying amount of the
hedged item
Change in fair
value of hedged
item used for
calculating
hedge
ineffectiveness
for the year
Remaining
adjustments
for
discontinued
hedges
Assets
Liabilities
Assets
Liabilities
Hedged item
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Investment securities
Investment securities
15,172
\u2014
\u2014
(555)
373
\u2014
Debt securities in issue
Debt securities in issue
\u2014
(7,900)
18
\u2014
(69)
\u2014
Subordinated debt
Subordinated liabilities and other
capital instruments
\u2014
(1,625)
25
\u2014
(63)
\u2014
Customer accounts
Customer accounts
\u2014
(4,225)
\u2014
(64)
(64)
\u2014
Customer loans
Loans and advances to customers
15
\u2014
1
\u2014
\u2014
\u2014
15,187
(13,750)
44
(619)
177
\u2014
2023
Nominal
amount of
hedging
instrument
Carrying amount of
hedging instrument2
Change in fair
value used for
calculating
hedge
ineffectiveness
for the year
Hedge
ineffectiveness
recognised in
the income
statement1
Assets
Liabilities
Hedging instrument1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate swaps hedging:
Investment securities
14,408
1,102
(136)
(724)
(1)
Debt securities in issue
8,514
136
(133)
256
4
Subordinated debt
1,500
\u2014
(73)
66
1
Customer accounts
\u2014
\u2014
\u2014
\u2014
\u2014
Customer loans
15
\u2014
(1)
(1)
\u2014
24,437
1,238
(343)
(403)
4
2023
Line item in Statement of Financial
Position where hedged item
is\u00a0included
Carrying amount
of\u00a0hedged\u00a0item
recognised\u00a0in
Statement of
Financial\u00a0Position
Accumulated amount of fair
value hedge adjustments on
the hedged\u00a0item included in
the\u00a0carrying amount of the
hedged item
Change in fair
value of hedged
item used for
calculating\u00a0
hedge
ineffectiveness
for the year
Remaining
adjustments for
discontinued
hedges
Assets
Liabilities
Assets
Liabilities
Hedged item
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Investment securities
Investment securities
13,540
\u2014
\u2014
(925)
723
\u2014
Debt securities in issue
Debt securities in issue
\u2014
(8,423)
89
\u2014
(252)
\u2014
Subordinated debt
Subordinated liabilities and other
capital instruments
\u2014
(1,412)
88
\u2014
(65)
\u2014
Customer accounts
Customer accounts
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Customer loans
Loans and advances to customers
15
\u2014
1
\u2014
1
\u2014
13,555
(9,835)
178
(925)
407
\u2014
1. All hedging instruments are included within derivative financial instruments on the statement of financial position and ineffectiveness is included within net trading
income in the income statement.
2. The net mark to market on fair value hedging derivatives, excluding accruals of \u20ac 97 million, is positive \u20ac 595 million (2023: \u20ac 130 million and positive \u20ac 765 million).
16\u00a0 Derivative financial instruments continued
Cash flow hedges of interest rate risk
The tables below set out the amounts relating to (a) items designated as hedging instruments and (b) the hedged items in cash flow hedges of
interest rate risk together with the related hedge ineffectiveness at 31 December 2024 and 2023:
2024
Carrying amount of the
hedging instrument
Nominal
amount of
the hedging
instrument
Assets
Liabilities
Change in fair
value of
hedging
instrument used
for calculating
hedge
ineffectiveness
in the year
Change in fair
value of
hedging
instrument
recognised in
OCI in the year
Hedge
Ineffectiveness
recognised in
the income
statement1
Amounts
reclassified
from the
cash flow
hedge
reserve to
the income
statement
Hedging instrument1
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate swaps hedging2:
Assets (interest rate risk)
39,765
598
(954)
167
173
(6)
(618)
3
Liabilities (interest rate risk)
2,207
66
(5)
\u2014
\u2014
\u2014
49
4
41,972
664
(959)
167
173
(6)
(569)
1. All hedging instruments are included within derivative financial instruments on the statement of financial position and all ineffectiveness is included within net trading
income in the income statement.
2. These can include both interest rate swaps and cross currency swaps, both of which are hedging interest rate risk.
3. Included in interest and similar income in the income statement.
4. Included in interest and similar expense in the income statement.
2024
Line item in
Statement of Financial Position in
which hedged item is included
Change in fair
value of hedged
item used for
calculating
hedge
ineffectiveness
for the year
Amounts in the
cash flow
hedging
reserves for
continuing
hedges 1
pre tax
Amounts in the
cash flow
hedging
reserves for
continuing
hedges 1
post tax
Amounts
remaining
in the cash flow
hedging reserves
from any hedging
relationship for
which hedge
accounting is no
longer applied
pre tax
Amounts
remaining
in the cash flow
hedging reserves
from any hedging
relationship for
which hedge
accounting is no
longer applied
post tax
Hedged item
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Assets (interest rate
risk)
Loans and advances to customers
(173)
(264)
(189)
25
22
Liabilities (interest
rate risk)
Customer accounts
\u2014
52
46
\u2014
\u2014
1. The cash flow hedging reserves are adjusted to the lower of either the cumulative gain or loss or the cumulative change in fair value (present value) of the hedged
item from inception of the hedge. The portion that is offset by the change in the cash flow hedging reserves is recognised in other comprehensive income with any
hedge ineffectiveness recognised in the income statement.
16\u00a0 Derivative financial instruments continued
Cash flow hedges of interest rate continued
2023
Carrying amount of the
hedging instrument
Hedging instrument1
Nominal
amount of the
hedging
instrument
Assets
Liabilities
Change in fair
value of hedging
instrument used
for calculating
hedge
ineffectiveness
in the year
Change in fair
value of the
hedging
instrument
recognised in
OCI
in the year
Hedge
Ineffectiveness
recognised in
the income
statement1
Amounts
reclassified
from the cash
flow hedge
reserve to the
income
statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Interest rate swaps hedging2
Assets (interest rate risk)
46,487
604
(1,095)
1,480
1,480
\u2014
(615)
3
Liabilities (interest rate risk)
1,903
77
(14)
(75)
(75)
\u2014
42
4
48,390
681
(1,109)
1,405
1,405
\u2014
(573)
1. All hedging instruments are included within derivative financial instruments on the statement of financial position and all ineffectiveness is included within net trading
income in the income statement.
2. These can include both interest rate swaps and cross currency swaps, both of which are hedging interest rate risk.
3. Included in interest and similar income and other (expense)/income in the income statement.
4. Included in interest and similar expense in the income statement.
2023
Line item in
Statement of Financial Position in
which hedged item is included
Change in fair
value of hedged
item used for
calculating hedge
ineffectiveness
for the year
Amounts
in the cash
flow hedging
reserves for
continuing
hedges1
pre tax
Amounts
in the cash
flow hedging
reserves for
continuing
hedges1
post tax
Amounts
remaining
in the cash flow
hedging reserves
from any
hedging
relationship for
which hedge
accounting
is no longer
applied
pre tax
Amounts remaining
in the cash flow
hedging reserves
from any
hedging relationship
for
which hedge
accounting is no
longer applied
post tax
Hedged item
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Assets (interest rate
risk)
Loans and advances to customers
(1,480)
(432)
(344)
13
11
Liabilities (interest rate
risk)
Customer accounts
75
52
45
\u2014
\u2014
1. The cash flow hedging reserves are adjusted to the lower of either the cumulative gain or loss or the cumulative change in fair value (present value) of the hedged
item from inception of the hedge. The portion that is offset by the change in the cash flow hedging reserves is recognised in other comprehensive income with any
hedge ineffectiveness recognised in the income statement.
16\u00a0 Derivative financial instruments continued
Cash flow hedges
The table below sets out the hedged cash flows which are expected to occur in the following periods:
2024
Within 1 year
Between 1 and
2 years
Between 2 and
5 years
More than
5 years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Forecast receivable cash flows
991
696
1,545
1,016
4,248
Forecast payable cash flows
77
53
93
29
252
2023
Within 1 year
Between 1 and
2 years
Between 2 and
5 years
More than
5 years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Forecast receivable cash flows
1,400
692
1,381
1,113
4,586
Forecast payable cash flows
73
44
59
21
197
The table below sets out the hedged cash flows, including amortisation of terminated cash flow hedges, which are expected to impact the income
statement in the following periods:
2024
Within 1 year
Between 1 and
2 years
Between 2 and
5 years
More than
5 years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Forecast receivable cash flows
991
696
1,545
1,016
4,248
Forecast payable cash flows
87
60
91
35
273
2023
Within 1 year
Between 1 and
2 years
Between 2 and
5 years
More than
5 years
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Forecast receivable cash flows
1,400
692
1,381
1,113
4,586
Forecast payable cash flows
88
47
48
29
212
16\u00a0 Derivative financial instruments continued
Hedges of net investment in foreign operations
The tables below set out the amounts relating to (a) items designated as hedging instruments and (b) the hedged items in hedges of the net
investment in foreign operations together with the related hedge ineffectiveness at 31 December 2024 and 2023.
2024
Carrying amount of the
hedging instrument
Hedging Instrument1
Nominal
amount of
hedging
instrument
Assets
Liabilities
Change in fair
value of
hedging
instrument used
for calculating
hedge
ineffectiveness
in the year
Change in fair
value of
hedging
instrument
recognised in
OCI in the year
Hedge
Ineffectiveness
recognised in
the income
statement1
Amounts that
have been
transferred
because the
hedged item has
affected the
income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Foreign exchange contracts
Derivatives hedging assets
1,439
\u2014
(24)
(66)
(66)
\u2014
\u2014
2
Derivatives hedging\u00a0 liabilities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2
1. All hedging instruments are included within derivative financial instruments on the statement of financial position and ineffectiveness is included within net trading
income in the income statement.
2. Included in other (expense)/income in the income statement.
2024
Line item in
Statement of
Financial
Position in
which hedged
item is included
Change in fair
value of hedged
item used for
calculating
hedge
ineffectiveness
for the year
Amount in the
foreign currency
translation
reserves for
continuing
hedges
pre tax
Amounts in the
foreign currency
translation
reserves for
continuing
hedges
post tax
Amounts
remaining
in the foreign
currency
translation
reserves from any
hedging
relationship for
which hedge
accounting is no
longer applied
pre tax
Amounts
remaining
in the foreign
currency
translation
reserves from any
hedging
relationship for
which hedge
accounting is no
longer applied
post tax
Hedged item
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net investment in UK subsidiary
Reserves
66
(108)
(94)
(8)
(7)
2023
Carrying amount of the
hedging instrument
Hedging Instrument1
Nominal
amount of
hedging
instrument
Assets
Liabilities
Change in fair
value of hedging
instrument used
for calculating
hedge
ineffectiveness
in the year
Change in fair
value of
hedging
instruments
recognised in
OCI in the year
Hedge
Ineffectiveness
recognised in
the\u00a0income
statement1
Amounts that
have been
transferred
because the
hedged item has
affected the
income statement
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Foreign exchange contracts
Derivatives hedging assets
1,504
2
(3)
(28)
(28)
\u2014
\u2014
2
Derivatives hedging liabilities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2
1. All hedging instruments are included within derivative financial instruments on the statement of financial position and ineffectiveness is included within net trading
income in the income statement.
2. Included in other (expense)/income in the income statement.
2023
Hedged item
Line item in
Statement of
Financial
Position in which
hedged item is
included
Change in fair
value of hedged
item used for
calculating
hedge
ineffectiveness
for the year
Amount in the
foreign currency
translation
reserves for
continuing
hedges
pre tax
Amounts in the
foreign currency
translation
reserves for
continuing
hedges
post tax
Amounts
remaining
in the foreign
currency
translation
reserves from any
hedging
relationship for
which hedge
accounting is no
longer applied
pre tax
Amounts
remaining
in the foreign
currency
translation
reserves from any
hedging
relationship for
which hedge
accounting is no
longer applied
post tax
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Net investment in UK subsidiary
Reserves
28
(50)
(43)
\u2014
\u2014
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-621": { "value": "
17\u00a0 Loans and advances to banks
2024
2023
\u20ac m
\u20ac m
At amortised cost
Funds placed with central banks
241
259
Funds placed with other banks
1,080
1,070
1,321
1,329
ECL allowance
\u2014
\u2014
Total loans and advances to banks
1,321
1,329
Loans and advances to banks by geographical area1
2024
2023
\u20ac m
\u20ac m
Ireland
989
937
United Kingdom
317
388
United States of America
15
4
Total loans and advances to banks by geographical area
1,321
1,329
1. The classification of loans and advances to banks by geographical area is based primarily on the location of the office recording the transaction.
Loans and advances to banks i nclude cash collateral of \u20ac 680 million (2023: \u20ac 741 million) placed with derivative counterparties in relation to net
derivative positions and placed with repurchase agreement counterparties. In addition, these include \u20ac 6 million (2023: \u20ac 5 million) relating to
restricted balances held in trust in respect of certain payables which are included in \u2018other liabilities\u2019 (note\u00a032).
The group is required by law to maintain reserve balances with the Bank of England. At 31 December 2024, these amounted to \u20ac 241 million\u00a0 \u00a0 \u00a0
(2023: \u20ac 259 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-622": { "value": "
18\u00a0 Loans and advances to customers
2024
2023
\u20ac m
\u20ac m
At amortised cost
Loans and advances to customers1
69,453
65,320
Amounts receivable under finance leases and hire purchase contracts
1,716
1,649
71,169
66,969
ECL allowance
(1,344)
(1,520)
69,825
65,449
Mandatorily at fair value through profit or loss
Loans and advances to customers
64
42
Total loans and advances to customers
69,889
65,491
Additional information:
Amounts which are repayable on demand
2,319
2,145
Amounts due from equity accounted investments
66
45
Undrawn commitments from equity accounted investments (less than one year)
208
225
Cash collateral placed with derivative counterparties
50
21
1. During the period, the Group acquired Ulster Bank tracker (and linked) mortgages of \u20ac 840 million (2023: \u20ac 3,842 million). In 2023 the Group acquired Ulster Bank
corporate and commercial loans of \u20ac 884 million.\u00a0
For details of credit quality of loans and advances to customers, including forbearance, refer to the sections denoted as \u2018audited\u2019 in the
\u2018Risk\u00a0management\u2019 section 2.1.2 to 2.1.6 of this report.
18\u00a0 Loans and advances to customers continued
Amounts receivable under finance leases and hire purchase contracts
The following balances principally comprise of leasing arrangements and hire purchase agreements of vehicles, plant, machinery and equipment:
2024
2023
\u20ac m
\u20ac m
Gross receivables
Not later than 1 year
647
640
Later than 1 year and not later than 2 years
493
466
Later than 2 years and not later than 3 years
361
344
Later than 3 years and not later than 4 years
222
208
Later than 4 years and not later than 5 years
109
104
Later than 5 years
24
19
Total
1,856
1,781
Unearned future finance income
(151)
(142)
Deferred costs incurred on origination
11
10
Present value of minimum payments
1,716
1,649
ECL allowance for uncollectible minimum payments receivable1
39
43
1. Included in 'ECL allowance on financial assets' (n ote 20).", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-624": { "value": "
19\u00a0 Securities financing
Securities financing transactions are generally entered into on a collateralised basis, with debt securities and equities, usually advanced or
received as collateral. Reverse repurchase agreements involve purchase of debt securities with an agreement to resell substantially identical
investments at a fixed price on a certain future date. Securities borrowing agreements involve purchase of debt securities and equities with an
agreement to resell substantially identical investments at a fixed price on a certain future date. Securities sold under agreements to repurchase
involves sales of securities with agreements to repurchase substantially identical investments at a fixed price on a certain future date.
2024
2023
Banks
Customers
Total
Banks
Customers
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Assets
Reverse repurchase agreements
3,380
175
3,555
3,628
171
3,799
Securities borrowing transactions
1,848
1,240
3,088
1,541
1,126
2,667
Total1
5,228
1,415
6,643
5,169
1,297
6,466
Liabilities
Securities sold under agreements to repurchase
191
5
196
575
\u2014
575
Total
191
5
196
575
\u2014
575
1. Classified as ECL Stage 1 and have an ECL of \u20ac 1 million at 31 December 2024 (31 December 2023: \u20ac 1 million).
In accordance with the terms of the reverse repurchase agreements and securities borrowing agreements, the Group accepts collateral that it is
permitted to sell or repledge in the absence of default by the owner of the collateral. At 31 December 2024, the total fair value of the collateral
received was \u20ac 6,643 million (2023: \u20ac 6,466 million), none of which had been resold or repledged. These transactions were conducted under terms
that are usual and customary to standard reverse repurchase agreements and securities borrowing agreements.
Securities sold under agreements to repurchase mature within six months and are secured by debt securities and eligible assets. At 31 December 2024,
in relation to securities sold under agreements to repurchase, the Group had pledged collateral with a fair value\u00a0of \u20ac 196 million (2023: \u20ac 575 million).
These transactions were conducted under terms that are usual and customary to standard securities sold under repurchase\u00a0transactions.
21\u00a0 Investment securities
The following table analyses the carrying value of investment securities by major classification at 31 December 2024 and 2023 .
2024
2023
\u20ac m
\u20ac m
Debt securities at FVOCI
Government securities
3,013
2,986
Supranational banks and government agencies securities
3,132
2,228
Asset backed securities
153
454
Bank securities
6,532
6,198
Corporate securities
738
622
Total debt securities at FVOCI1
13,568
12,488
of which provided as collateral
1,963
3,558
Debt securities at amortised cost
Government securities
2,226
2,177
Supranational banks and government agencies securities
237
179
Asset backed securities
2,113
1,917
Bank securities
79
77
Corporate securities
148
160
Total debt securities at amortised cost
4,803
4,510
of which provided as collateral
859
1,397
Total debt securities
18,371
16,998
Total of which provided as collateral
2,822
4,955
Equity securities
Equity investments at FVTPL
297
355
Total equity securities
297
355
Total investment securities
18,668
17,353
The following table analyses the carrying amount of debt securities by ECL stage:
Gross amount
Stage 1
18,372
16,991
Stage 2
\u2014
10
Total debt securities
18,372
17,001
ECL2
(1)
(3)
Carrying value
18,371
16,998
1. The ECL of \u20ac 2 million (2023: \u20ac 2 million) on debt securities at FVOCI does not reduce the carrying amount, but an amount equal to the allowance is recognised in
OCI as an accumulated impairment amount, with corresponding impairment gains or losses recognised in the income statement.
2. Relates to debt securities at amortised cost.
38\u00a0 Offsetting financial assets and financial liabilities
The disclosures set out in the tables below include financial assets and financial liabilities that:
\u2022 Are offset in the Group\u2019s statement of financial position; or
\u2022 Are subject to enforceable master netting arrangements or similar agreements that cover similar financial instruments, irrespective of whether\u00a0
they are offset in the statement of financial position.
The similar agreements include derivative clearing agreements, global master repurchase agreements and global master securities lending\u00a0
agreements. Similar financial instruments include derivatives, sales and repurchase agreements, reverse sale and repurchase agreements,
and\u00a0securities borrowing and lending agreements. Financial instruments such as loans and advances and customer accounts are not included
in\u00a0the tables below unless they are offset in the statement of financial position.
The Group has a number of ISDA Master Agreements (netting agreements) in place which allow it to net the termination values of derivative\u00a0
contracts upon the occurrence of an event of default with respect to its counterparties. The enforcement of netting agreements would
potentially\u00a0reduce the statement of financial position carrying amount of derivative assets and liabilities by \u20ac 1,385 million at 31 December 2024
(2023: \u20ac 1,556 million).\u00a0 Additionally, the Group has agreements in place which may allow it to net the termination values of cross currency swaps
upon the occurrence of an event of default.
The Group\u2019s sale and repurchase and reverse sale-and-repurchase transactions and securities borrowing and lending are covered by netting\u00a0
agreements with terms similar to those of ISDA Master Agreements. The ISDA Master Agreements and similar master netting arrangements do not
meet the criteria for offsetting in the statement of financial position where a right of set-off of recognised amounts becomes enforceable only
following an event of default, insolvency or bankruptcy of the\u00a0 Group or the counterparties. Offsetting in the statement of financial position is
applied where the Group has a legally enforceable right to set-off the recognised amounts and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
The Group provides and accepts collateral in the form of cash and marketable securities in respect of the following transactions:
\u2022 Derivatives;
\u2022 Sale and repurchase agreements;
\u2022 Reverse sale and repurchase agreements; and
\u2022 Securities lending and borrowing.
Collateral is subject to the standard industry terms of Credit Support Annexes (\u2018CSAs\u2019), which enable the Group to pledge or sell securities
received during the term of the transaction. The collateral must be returned on the maturity of the transaction. The terms also give each
counterparty the right to terminate the related transactions where the counterparty fails to post collateral. The CSAs in place provide collateral
for\u00a0derivative contracts. At 31 December 2024, \u20ac 698 million (2023: \u20ac 713 million) of CSAs are included within financial assets and \u20ac 814 million
(2023: \u20ac 839 million) of CSAs are included within financial liabilities.
The following table shows financial assets and financial liabilities subject to offsetting, enforceable master netting arrangements and similar
agreements and those amounts not subject to offsetting at 31 December 2024 and 2023. The effects of over-collateralisation have not been taken
into account in the table below.
Amounts subject to enforceable netting arrangements
2024
Gross
amounts of
recognised
financial
assets
Gross
amounts of
recognised
financial
liabilities
offset in the
statement
of financial
position
Net
amounts of
financial
assets
presented
in the
statement
of financial
position
Related amounts not
offset in the statement
of financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
assets
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial assets
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
2,134
\u2014
2,134
(1,385)
(251)
498
10
2,144
Securities financing
Reverse repurchase agreements
19
5,215
(1,660)
3,555
(3,538)
(17)
\u2014
\u2014
3,555
Securities borrowings
19
3,088
\u2014
3,088
(3,088)
\u2014
\u2014
\u2014
3,088
Total
10,437
(1,660)
8,777
(8,011)
(268)
498
10
8,787
Amounts subject to enforceable netting arrangements
2024
Gross
amounts of
recognised
financial
liabilities
Gross
amounts of
recognised
financial
assets
offset in the
statement
of financial
position
Net
amounts of
financial
liabilities
presented
in the
statement
of financial
position
Related amounts not
offset in the statement
of financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
liabilities
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial liabilities
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
1,779
\u2014
1,779
(1,385)
(135)
259
28
1,807
Securities financing
Securities sold under
agreements to repurchase
19
1,856
(1,660)
196
(187)
(9)
\u2014
\u2014
196
Total
3,635
(1,660)
1,975
(1,572)
(144)
259
28
2,003
38\u00a0 Offsetting financial assets and financial liabilities continued
Amounts subject to enforceable netting arrangements
2023
Gross
amounts of
recognised
financial
assets
Gross
amounts of
recognised
financial
liabilities
offset in the
statement
of financial
position
Net
amounts of
financial
assets
presented
in the
statement of
financial
position
Related amounts not
offset\u00a0in the statement of
financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
assets
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial assets
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
2,356
\u2014
2,356
(1,556)
(218)
582
21
2,377
Securities financing
Reverse repurchase
agreements
19
7,530
(3,731)
3,799
(3,734)
(65)
\u2014
\u2014
3,799
Securities borrowings
19
2,667
\u2014
2,667
(2,667)
\u2014
\u2014
\u2014
2,667
Total
12,553
(3,731)
8,822
(7,957)
(283)
582
21
8,843
Amounts subject to enforceable netting arrangements
2023
Gross
amounts of
recognised
financial
liabilities
Gross
amounts of
recognised
financial
assets
offset in the
statement
of financial
position
Net
amounts of
financial
liabilities
presented
in the
statement of
financial
position
Related amounts not
offset\u00a0in the statement of
financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
liabilities
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial liabilities
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
1,881
\u2014
1,881
(1,556)
(92)
233
21
1,902
Securities financing
Securities sold under
agreements to repurchase
19
4,306
(3,731)
575
(534)
(41)
\u2014
\u2014
575
Total
6,187
(3,731)
2,456
(2,090)
(133)
233
21
2,477
39\u00a0 Contingent liabilities and commitments
In the normal course of business, the Group is a party to financial instruments with off-balance sheet risk to meet the financing needs of customers. These
instruments involve, to varying degrees, elements of credit risk which are not reflected in the consolidated statement of financial position. Credit risk is
defined as the possibility of sustaining a loss because the other party to a financial instrument fails to perform in accordance with the terms of the contract.
The Group\u2019s maximum exposure to credit loss under contingent liabilities and commitments to extend credit, in the event of non-performance by\u00a0the
other party where all counterclaims, collateral or security prove valueless, is represented by the contractual amounts of those instruments. The Group
uses the same credit control and risk management policies in undertaking off-balance sheet commitments as it does for \u2018on-balance sheet lending\u2019.
The following table gives the nominal or contract amounts of contingent liabilities and commitments:
Contract amount
2024
2023
\u20ac m
\u20ac m
Contingent liabilities1 \u2013 credit related
Guarantees and assets pledged as collateral security:
Guarantees and irrevocable letters of credit
952
829
Other contingent liabilities
24
28
976
857
Commitments2
Documentary credits and short term trade-related transactions
276
208
Undrawn formal standby facilities, credit lines and other commitments to lend:
Less than 1 year
10,443
9,827
1 year and over
6,104
6,101
16,823
16,136
Total contingent liabilities and commitments
17,799
16,993
1. Contingent liabilities are off-balance sheet products and include guarantees, irrevocable letters of credit and other contingent liability products.
2. A commitment is an off-balance sheet product where there is an agreement to provide an undrawn credit facility.
For details of the geographic concentration of contingent liabilities and commitments and internal credit ratings, see pages 204 and 215 in the Risk
management section of this report. Provisions for ECLs on loan commitments and financial guarantee contracts are set out in note 34.
Legal proceedings
The\u2008Group, in the course of its business, is frequently involved in litigation cases. However, it is not, nor has been involved in, nor are there, so far
as the Group is aware, (other than as set out in the following paragraphs), pending or threatened by or against the Group any legal or arbitration
proceedings, including governmental proceedings, which may have, or have had during the previous twelve months, a material effect on the
financial position, profitability or cash flows of the\u2008Group.
Specifically, litigation has been served on the Group by customers that are pursuing claims in relation to tracker mortgages. Customers have also
lodged complaints to the Financial Services and Pensions Ombudsman (\u2018FSPO\u2019) in\u00a0relation to tracker mortgages issues.
Further claims may also be served in the future in relation to tracker mortgages. The Group will also receive further rulings by the FSPO in relation
to complaints concerning tracker mortgages.
Based on the facts currently known and the current stages that the litigation and the FSPO\u2019s complaints process is at, it is not practicable at this
time to predict the final outcome of this litigation/FSPO complaints, nor the timing and possible impact on the Group.
TARGET-Ireland \u2013 Gross Settlement System
TARGET Services have been developed to ensure the free flow of cash, securities and collateral across Europe. The TARGET-Ireland system is a
real time gross settlement system for large volume interbank payments in Euro. On 16 March 2023, as part of its participation in TARGET-Ireland,
Allied Irish Banks, p.l.c. (\u2018AIB\u2019) entered a deed of charge in favour of the Central Bank of Ireland (\u2018CBI\u2019). This charge gives the CBI a first floating
charge security over all present and future credit balances in AIB\u2019s TARGET-Ireland Accounts to secure all liabilities of AIB to the CBI in connection
with AIB\u2019s participation in TARGET-Ireland.
In addition, the CBI has provided AIB with a credit line facility for intra-day credit in TARGET2-Ireland (now TARGET-Ireland) in relation to
Eurosystem Operations. In connection with this, AIB on 7 April 2014, provided the CBI with a fixed charge security over AIB\u2019s eligible assets (as
identified by the CBI) which are held in a designated collateral account and also a floating charge security over other eligible assets of AIB.
AIB cannot, without the prior written consent of the CBI:
\u2022 Create or attempt to create or permit to arise or subsist any encumbrance on or over this charged property or any part of it; or
\u2022 Otherwise than in the ordinary course of business, sell, transfer, lend or otherwise dispose of or deal in the property or assets subject to the\u00a0
charges or any part of it.\u00a0
The financial assets pledged as collateral, in relation to the first fixed charge, are included in the disclosure in note 28 for financial assets pledged.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-623": { "value": "
19\u00a0 Securities financing
Securities financing transactions are generally entered into on a collateralised basis, with debt securities and equities, usually advanced or
received as collateral. Reverse repurchase agreements involve purchase of debt securities with an agreement to resell substantially identical
investments at a fixed price on a certain future date. Securities borrowing agreements involve purchase of debt securities and equities with an
agreement to resell substantially identical investments at a fixed price on a certain future date. Securities sold under agreements to repurchase
involves sales of securities with agreements to repurchase substantially identical investments at a fixed price on a certain future date.
2024
2023
Banks
Customers
Total
Banks
Customers
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Assets
Reverse repurchase agreements
3,380
175
3,555
3,628
171
3,799
Securities borrowing transactions
1,848
1,240
3,088
1,541
1,126
2,667
Total1
5,228
1,415
6,643
5,169
1,297
6,466
Liabilities
Securities sold under agreements to repurchase
191
5
196
575
\u2014
575
Total
191
5
196
575
\u2014
575
1. Classified as ECL Stage 1 and have an ECL of \u20ac 1 million at 31 December 2024 (31 December 2023: \u20ac 1 million).
In accordance with the terms of the reverse repurchase agreements and securities borrowing agreements, the Group accepts collateral that it is
permitted to sell or repledge in the absence of default by the owner of the collateral. At 31 December 2024, the total fair value of the collateral
received was \u20ac 6,643 million (2023: \u20ac 6,466 million), none of which had been resold or repledged. These transactions were conducted under terms
that are usual and customary to standard reverse repurchase agreements and securities borrowing agreements.
Securities sold under agreements to repurchase mature within six months and are secured by debt securities and eligible assets. At 31 December 2024,
in relation to securities sold under agreements to repurchase, the Group had pledged collateral with a fair value\u00a0of \u20ac 196 million (2023: \u20ac 575 million).
These transactions were conducted under terms that are usual and customary to standard securities sold under repurchase\u00a0transactions.", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-625": { "value": "
21\u00a0 Investment securities
The following table analyses the carrying value of investment securities by major classification at 31 December 2024 and 2023 .
2024
2023
\u20ac m
\u20ac m
Debt securities at FVOCI
Government securities
3,013
2,986
Supranational banks and government agencies securities
3,132
2,228
Asset backed securities
153
454
Bank securities
6,532
6,198
Corporate securities
738
622
Total debt securities at FVOCI1
13,568
12,488
of which provided as collateral
1,963
3,558
Debt securities at amortised cost
Government securities
2,226
2,177
Supranational banks and government agencies securities
237
179
Asset backed securities
2,113
1,917
Bank securities
79
77
Corporate securities
148
160
Total debt securities at amortised cost
4,803
4,510
of which provided as collateral
859
1,397
Total debt securities
18,371
16,998
Total of which provided as collateral
2,822
4,955
Equity securities
Equity investments at FVTPL
297
355
Total equity securities
297
355
Total investment securities
18,668
17,353
The following table analyses the carrying amount of debt securities by ECL stage:
Gross amount
Stage 1
18,372
16,991
Stage 2
\u2014
10
Total debt securities
18,372
17,001
ECL2
(1)
(3)
Carrying value
18,371
16,998
1. The ECL of \u20ac 2 million (2023: \u20ac 2 million) on debt securities at FVOCI does not reduce the carrying amount, but an amount equal to the allowance is recognised in
OCI as an accumulated impairment amount, with corresponding impairment gains or losses recognised in the income statement.
2. Relates to debt securities at amortised cost.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-628": { "value": "
22\u00a0 Investments accounted for using the equity method
2024
2023
Associates
Joint
venture
Total
Associates
Joint
venture
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Share of net assets including goodwill
At 1 January
208
102
310
159
14
173
Investment during the year
27
10
37
18
107
125
Dividends received
(25)
\u2014
(25)
\u2014
\u2014
\u2014
Share of results of equity accounted investments (after tax)
33
1
(7)
26
31
1
(19)
12
At 31 December
243
105
348
208
102
310
1. Share of results of equity accounted investments includes \u20ac 34 million (2023: \u20ac 35 million) relating to AIB Merchant Services.
Details of the Group\u2019s associates and joint venture
Investments in associates comprises the Group\u2019s investment in AIB Merchant Services, Clearpay DAC, First Homes Scheme DAC and Autolease
Fleet Management Ltd. The investment in joint venture comprises the Group\u2019s investment in AIB life, being the Group\u2019s joint venture with Great-
West Lifeco\u00a0Inc. None of the investments are considered individually material to the Group.
The following is the principal associate company of the Group at 31 December 2024 and 2023 :
Name of associate
Principal activity
Place of incorporation
and operation
Proportion of ownership interest
and voting power held by
the\u00a0Group
2024
%
2023
%
Zolter Services DAC (holds 100% of First
Merchant Processing (Ireland) DAC and
First\u00a0Merchant Processing UK Ltd, together
trading as AIB Merchant Services)
Provider of merchant
payment solutions
Registered Office: Unit 6,
Belfield Business Park,
Clonskeagh, Dublin 4
Ireland
49.9
49.9
In accordance with Sections 316 and 348 of the Companies Act 2014 and the European Communities (Credit Institutions: Financial Statements)
Regulations 2015, AIB Group plc will annex a full listing of associated undertakings to its annual return to the Companies Registration Office.\u00a0
Transactions with the Group\u2019s associates and joint venture
Banking transactions between the Group and its associates and joint venture are entered into in the normal course of business. For further
information see notes 18 and 29. There was no unrecognised share of losses of associates or joint ventures at 31 December 2024 or 2023.
Change in the Group\u2019s ownership interest in associates
There were no material disposals and/or change in the Group\u2019s ownership interest in the current year.
Significant restrictions
There is no significant restriction on the ability of associates or joint ventures to transfer funds to the Group in the form of cash or dividends, or to
repay loans or advances made by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-627": { "value": "
22\u00a0 Investments accounted for using the equity method
2024
2023
Associates
Joint
venture
Total
Associates
Joint
venture
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Share of net assets including goodwill
At 1 January
208
102
310
159
14
173
Investment during the year
27
10
37
18
107
125
Dividends received
(25)
\u2014
(25)
\u2014
\u2014
\u2014
Share of results of equity accounted investments (after tax)
33
1
(7)
26
31
1
(19)
12
At 31 December
243
105
348
208
102
310
1. Share of results of equity accounted investments includes \u20ac 34 million (2023: \u20ac 35 million) relating to AIB Merchant Services.
Details of the Group\u2019s associates and joint venture
Investments in associates comprises the Group\u2019s investment in AIB Merchant Services, Clearpay DAC, First Homes Scheme DAC and Autolease
Fleet Management Ltd. The investment in joint venture comprises the Group\u2019s investment in AIB life, being the Group\u2019s joint venture with Great-
West Lifeco\u00a0Inc. None of the investments are considered individually material to the Group.
The following is the principal associate company of the Group at 31 December 2024 and 2023 :
Name of associate
Principal activity
Place of incorporation
and operation
Proportion of ownership interest
and voting power held by
the\u00a0Group
2024
%
2023
%
Zolter Services DAC (holds 100% of First
Merchant Processing (Ireland) DAC and
First\u00a0Merchant Processing UK Ltd, together
trading as AIB Merchant Services)
Provider of merchant
payment solutions
Registered Office: Unit 6,
Belfield Business Park,
Clonskeagh, Dublin 4
Ireland
49.9
49.9
In accordance with Sections 316 and 348 of the Companies Act 2014 and the European Communities (Credit Institutions: Financial Statements)
Regulations 2015, AIB Group plc will annex a full listing of associated undertakings to its annual return to the Companies Registration Office.\u00a0
Transactions with the Group\u2019s associates and joint venture
Banking transactions between the Group and its associates and joint venture are entered into in the normal course of business. For further
information see notes 18 and 29. There was no unrecognised share of losses of associates or joint ventures at 31 December 2024 or 2023.
Change in the Group\u2019s ownership interest in associates
There were no material disposals and/or change in the Group\u2019s ownership interest in the current year.
Significant restrictions
There is no significant restriction on the ability of associates or joint ventures to transfer funds to the Group in the form of cash or dividends, or to
repay loans or advances made by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-626": { "value": "
22\u00a0 Investments accounted for using the equity method
2024
2023
Associates
Joint
venture
Total
Associates
Joint
venture
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Share of net assets including goodwill
At 1 January
208
102
310
159
14
173
Investment during the year
27
10
37
18
107
125
Dividends received
(25)
\u2014
(25)
\u2014
\u2014
\u2014
Share of results of equity accounted investments (after tax)
33
1
(7)
26
31
1
(19)
12
At 31 December
243
105
348
208
102
310
1. Share of results of equity accounted investments includes \u20ac 34 million (2023: \u20ac 35 million) relating to AIB Merchant Services.
Details of the Group\u2019s associates and joint venture
Investments in associates comprises the Group\u2019s investment in AIB Merchant Services, Clearpay DAC, First Homes Scheme DAC and Autolease
Fleet Management Ltd. The investment in joint venture comprises the Group\u2019s investment in AIB life, being the Group\u2019s joint venture with Great-
West Lifeco\u00a0Inc. None of the investments are considered individually material to the Group.
The following is the principal associate company of the Group at 31 December 2024 and 2023 :
Name of associate
Principal activity
Place of incorporation
and operation
Proportion of ownership interest
and voting power held by
the\u00a0Group
2024
%
2023
%
Zolter Services DAC (holds 100% of First
Merchant Processing (Ireland) DAC and
First\u00a0Merchant Processing UK Ltd, together
trading as AIB Merchant Services)
Provider of merchant
payment solutions
Registered Office: Unit 6,
Belfield Business Park,
Clonskeagh, Dublin 4
Ireland
49.9
49.9
In accordance with Sections 316 and 348 of the Companies Act 2014 and the European Communities (Credit Institutions: Financial Statements)
Regulations 2015, AIB Group plc will annex a full listing of associated undertakings to its annual return to the Companies Registration Office.\u00a0
Transactions with the Group\u2019s associates and joint venture
Banking transactions between the Group and its associates and joint venture are entered into in the normal course of business. For further
information see notes 18 and 29. There was no unrecognised share of losses of associates or joint ventures at 31 December 2024 or 2023.
Change in the Group\u2019s ownership interest in associates
There were no material disposals and/or change in the Group\u2019s ownership interest in the current year.
Significant restrictions
There is no significant restriction on the ability of associates or joint ventures to transfer funds to the Group in the form of cash or dividends, or to
repay loans or advances made by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-633": { "value": "
23\u00a0 Intangible assets and goodwill
2024
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
237
1,805
158
128
42
2,370
Additions
13
106
113
\u2014
\u2014
232
Transfers in/(out)
\u2014
105
(105)
\u2014
\u2014
\u2014
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
3
\u2014
\u2014
\u2014
3
At 31 December
216
1,899
164
128
42
2,449
Amortisation/impairment
At 1 January
214
1,201
\u2014
\u2014
30
1,445
Amortisation for the year3
11
205
\u2014
\u2014
6
222
Impairment for the year3
\u2014
\u2014
2
\u2014
\u2014
2
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
2
\u2014
\u2014
\u2014
2
At 31 December
191
1,288
\u2014
\u2014
36
1,515
Carrying value at 31 December
25
611
164
128
6
934
2023
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
243
1,638
149
120
40
2,190
Additions
10
91
95
8
2
206
Transfers in/(out)
\u2014
86
(86)
\u2014
\u2014
\u2014
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
237
1,805
158
128
42
2,370
Amortisation/impairment
At 1 January
221
1,005
\u2014
\u2014
24
1,250
Amortisation for the year3
9
205
\u2014
\u2014
6
220
Impairment for the year3
\u2014
1
\u2014
\u2014
\u2014
1
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
214
1,201
\u2014
\u2014
30
1,445
Carrying value at 31 December
23
604
158
128
12
925
1. In 2023 the Group acquired two subsidiaries, Gaiastream Ltd (trading as Clearstream Solutions) and ParkMagic Mobile Solutions Ltd, which were not material either
individually or collectively. The Group recognised goodwill of \u20ac 8 million as a result of these transactions.
2. Relates to assets which are no longer in use with a Nil carrying value.
3. Included in \u2018Impairment and amortisation of intangible assets\u2019 in the consolidated income statement.
Future capital expenditure in relation to both intangible assets and property, plant and equipment is set out in note 24.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-632": { "value": "
23\u00a0 Intangible assets and goodwill
2024
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
237
1,805
158
128
42
2,370
Additions
13
106
113
\u2014
\u2014
232
Transfers in/(out)
\u2014
105
(105)
\u2014
\u2014
\u2014
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
3
\u2014
\u2014
\u2014
3
At 31 December
216
1,899
164
128
42
2,449
Amortisation/impairment
At 1 January
214
1,201
\u2014
\u2014
30
1,445
Amortisation for the year3
11
205
\u2014
\u2014
6
222
Impairment for the year3
\u2014
\u2014
2
\u2014
\u2014
2
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
2
\u2014
\u2014
\u2014
2
At 31 December
191
1,288
\u2014
\u2014
36
1,515
Carrying value at 31 December
25
611
164
128
6
934
2023
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
243
1,638
149
120
40
2,190
Additions
10
91
95
8
2
206
Transfers in/(out)
\u2014
86
(86)
\u2014
\u2014
\u2014
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
237
1,805
158
128
42
2,370
Amortisation/impairment
At 1 January
221
1,005
\u2014
\u2014
24
1,250
Amortisation for the year3
9
205
\u2014
\u2014
6
220
Impairment for the year3
\u2014
1
\u2014
\u2014
\u2014
1
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
214
1,201
\u2014
\u2014
30
1,445
Carrying value at 31 December
23
604
158
128
12
925
1. In 2023 the Group acquired two subsidiaries, Gaiastream Ltd (trading as Clearstream Solutions) and ParkMagic Mobile Solutions Ltd, which were not material either
individually or collectively. The Group recognised goodwill of \u20ac 8 million as a result of these transactions.
2. Relates to assets which are no longer in use with a Nil carrying value.
3. Included in \u2018Impairment and amortisation of intangible assets\u2019 in the consolidated income statement.
Future capital expenditure in relation to both intangible assets and property, plant and equipment is set out in note 24.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-631": { "value": "
23\u00a0 Intangible assets and goodwill
2024
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
237
1,805
158
128
42
2,370
Additions
13
106
113
\u2014
\u2014
232
Transfers in/(out)
\u2014
105
(105)
\u2014
\u2014
\u2014
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
3
\u2014
\u2014
\u2014
3
At 31 December
216
1,899
164
128
42
2,449
Amortisation/impairment
At 1 January
214
1,201
\u2014
\u2014
30
1,445
Amortisation for the year3
11
205
\u2014
\u2014
6
222
Impairment for the year3
\u2014
\u2014
2
\u2014
\u2014
2
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
2
\u2014
\u2014
\u2014
2
At 31 December
191
1,288
\u2014
\u2014
36
1,515
Carrying value at 31 December
25
611
164
128
6
934
2023
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
243
1,638
149
120
40
2,190
Additions
10
91
95
8
2
206
Transfers in/(out)
\u2014
86
(86)
\u2014
\u2014
\u2014
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
237
1,805
158
128
42
2,370
Amortisation/impairment
At 1 January
221
1,005
\u2014
\u2014
24
1,250
Amortisation for the year3
9
205
\u2014
\u2014
6
220
Impairment for the year3
\u2014
1
\u2014
\u2014
\u2014
1
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
214
1,201
\u2014
\u2014
30
1,445
Carrying value at 31 December
23
604
158
128
12
925
1. In 2023 the Group acquired two subsidiaries, Gaiastream Ltd (trading as Clearstream Solutions) and ParkMagic Mobile Solutions Ltd, which were not material either
individually or collectively. The Group recognised goodwill of \u20ac 8 million as a result of these transactions.
2. Relates to assets which are no longer in use with a Nil carrying value.
3. Included in \u2018Impairment and amortisation of intangible assets\u2019 in the consolidated income statement.
Future capital expenditure in relation to both intangible assets and property, plant and equipment is set out in note 24.
24\u00a0 Property, plant and equipment
2024
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
173
39
109
370
17
443
5
1,156
Transfers in/(out)
1
\u2014
13
2
(16)
\u2014
\u2014
\u2014
Additions
1
\u2014
2
13
9
8
1
34
Transfers (to)/from held for sale
\u2014
(2)
\u2014
\u2014
\u2014
\u2014
\u2014
(2)
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Exchange translation adjustments
1
\u2014
\u2014
1
\u2014
2
\u2014
4
At 31 December
176
37
120
353
10
421
5
1,122
Depreciation/impairment
At 1 January
54
14
61
298
\u2014
171
\u2014
598
Depreciation charge for the year2
5
1
9
22
\u2014
34
2
73
Impairment charge for the year2
1
1
1
1
\u2014
\u2014
\u2014
4
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Transfers (to)/from held for sale
\u2014
(1)
\u2014
\u2014
\u2014
\u2014
\u2014
(1)
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
1
1
2
At 31 December
60
15
67
288
\u2014
174
2
606
Carrying value at 31 December
116
22
53
65
10
247
3
516
2023
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
168
38
107
378
9
377
4
1,081
Transfers in/(out)
2
\u2014
1
1
(4)
\u2014
\u2014
\u2014
Additions
4
1
2
15
12
57
5
96
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
173
39
109
370
17
443
5
1,156
Depreciation/impairment
At 1 January
50
13
53
298
\u2014
128
3
545
Depreciation charge for the year2
5
1
9
24
\u2014
34
1
74
Impairment charge for the year2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Transfers (to)/from held for sale
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
54
14
61
298
\u2014
171
\u2014
598
Carrying value at 31 December
119
25
48
72
17
272
5
558
1. Relates to assets which are no longer in use with a Nil carrying value.
2. Included in \u2018Impairment and depreciation of property, plant and equipment\u2019 in the consolidated income statement.
The net carrying value of property occupied by the Group for its own activities was \u20ac 182 million (2023: \u20ac 183 million) in relation to owned assets
and \u20ac 247 million in relation to right-of-use assets (2023: \u20ac 272 million), excluding those held as disposal groups and non-current assets held for
sale. Property leased to others by the Group had a carrying value of \u20ac 9 million (2023: \u20ac 9 million).
24\u00a0 Property, plant and equipment continued
Future capital expenditure
The table below shows future capital expenditure in relation to both property, plant and equipment and intangible assets (excluding right-of-use assets).
2024
2023
\u20ac m
\u20ac m
Estimated outstanding commitments for capital expenditure not provided for in the financial statements
2
7
Capital expenditure authorised but not yet contracted for
14
7
Leased assets
Property
The Group leases property for its offices and retail branch outlets. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. Most of these leases carry statutory renewal rights, or include an option to renew the lease for an additional period
after the end of the contract term. Where the Group is likely to exercise these options, this has been taken into account in determining the lease
liability and the right-of-use asset.
Other
The Group leases motor vehicles, ATM offsite locations and IT equipment.
Lease liabilities
A maturity analysis of lease liabilities is shown in note 31.
Amounts recognised in income statement
2024
2023
\u20ac m
\u20ac m
Depreciation expense on right-of-use assets
36
35
Interest on lease liabilities (note 5)
9
9
Amounts recognised in statement of cash flows
2024
2023
\u20ac m
\u20ac m
Total cash outflow for leases during the year1
43
43
1. Includes amounts reported as interest expense on lease liabilities of \u20ac 9 million (2023: \u20ac 9 million) and amounts reported as principal repayments on lease liabilities
of \u20ac 34 million (2023: \u20ac 34 million). Refer to note 31.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-630": { "value": "
23\u00a0 Intangible assets and goodwill
2024
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
237
1,805
158
128
42
2,370
Additions
13
106
113
\u2014
\u2014
232
Transfers in/(out)
\u2014
105
(105)
\u2014
\u2014
\u2014
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
3
\u2014
\u2014
\u2014
3
At 31 December
216
1,899
164
128
42
2,449
Amortisation/impairment
At 1 January
214
1,201
\u2014
\u2014
30
1,445
Amortisation for the year3
11
205
\u2014
\u2014
6
222
Impairment for the year3
\u2014
\u2014
2
\u2014
\u2014
2
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
2
\u2014
\u2014
\u2014
2
At 31 December
191
1,288
\u2014
\u2014
36
1,515
Carrying value at 31 December
25
611
164
128
6
934
2023
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
243
1,638
149
120
40
2,190
Additions
10
91
95
8
2
206
Transfers in/(out)
\u2014
86
(86)
\u2014
\u2014
\u2014
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
237
1,805
158
128
42
2,370
Amortisation/impairment
At 1 January
221
1,005
\u2014
\u2014
24
1,250
Amortisation for the year3
9
205
\u2014
\u2014
6
220
Impairment for the year3
\u2014
1
\u2014
\u2014
\u2014
1
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
214
1,201
\u2014
\u2014
30
1,445
Carrying value at 31 December
23
604
158
128
12
925
1. In 2023 the Group acquired two subsidiaries, Gaiastream Ltd (trading as Clearstream Solutions) and ParkMagic Mobile Solutions Ltd, which were not material either
individually or collectively. The Group recognised goodwill of \u20ac 8 million as a result of these transactions.
2. Relates to assets which are no longer in use with a Nil carrying value.
3. Included in \u2018Impairment and amortisation of intangible assets\u2019 in the consolidated income statement.
Future capital expenditure in relation to both intangible assets and property, plant and equipment is set out in note 24.
24\u00a0 Property, plant and equipment
2024
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
173
39
109
370
17
443
5
1,156
Transfers in/(out)
1
\u2014
13
2
(16)
\u2014
\u2014
\u2014
Additions
1
\u2014
2
13
9
8
1
34
Transfers (to)/from held for sale
\u2014
(2)
\u2014
\u2014
\u2014
\u2014
\u2014
(2)
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Exchange translation adjustments
1
\u2014
\u2014
1
\u2014
2
\u2014
4
At 31 December
176
37
120
353
10
421
5
1,122
Depreciation/impairment
At 1 January
54
14
61
298
\u2014
171
\u2014
598
Depreciation charge for the year2
5
1
9
22
\u2014
34
2
73
Impairment charge for the year2
1
1
1
1
\u2014
\u2014
\u2014
4
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Transfers (to)/from held for sale
\u2014
(1)
\u2014
\u2014
\u2014
\u2014
\u2014
(1)
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
1
1
2
At 31 December
60
15
67
288
\u2014
174
2
606
Carrying value at 31 December
116
22
53
65
10
247
3
516
2023
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
168
38
107
378
9
377
4
1,081
Transfers in/(out)
2
\u2014
1
1
(4)
\u2014
\u2014
\u2014
Additions
4
1
2
15
12
57
5
96
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
173
39
109
370
17
443
5
1,156
Depreciation/impairment
At 1 January
50
13
53
298
\u2014
128
3
545
Depreciation charge for the year2
5
1
9
24
\u2014
34
1
74
Impairment charge for the year2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Transfers (to)/from held for sale
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
54
14
61
298
\u2014
171
\u2014
598
Carrying value at 31 December
119
25
48
72
17
272
5
558
1. Relates to assets which are no longer in use with a Nil carrying value.
2. Included in \u2018Impairment and depreciation of property, plant and equipment\u2019 in the consolidated income statement.
The net carrying value of property occupied by the Group for its own activities was \u20ac 182 million (2023: \u20ac 183 million) in relation to owned assets
and \u20ac 247 million in relation to right-of-use assets (2023: \u20ac 272 million), excluding those held as disposal groups and non-current assets held for
sale. Property leased to others by the Group had a carrying value of \u20ac 9 million (2023: \u20ac 9 million).
24\u00a0 Property, plant and equipment continued
Future capital expenditure
The table below shows future capital expenditure in relation to both property, plant and equipment and intangible assets (excluding right-of-use assets).
2024
2023
\u20ac m
\u20ac m
Estimated outstanding commitments for capital expenditure not provided for in the financial statements
2
7
Capital expenditure authorised but not yet contracted for
14
7
Leased assets
Property
The Group leases property for its offices and retail branch outlets. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. Most of these leases carry statutory renewal rights, or include an option to renew the lease for an additional period
after the end of the contract term. Where the Group is likely to exercise these options, this has been taken into account in determining the lease
liability and the right-of-use asset.
Other
The Group leases motor vehicles, ATM offsite locations and IT equipment.
Lease liabilities
A maturity analysis of lease liabilities is shown in note 31.
Amounts recognised in income statement
2024
2023
\u20ac m
\u20ac m
Depreciation expense on right-of-use assets
36
35
Interest on lease liabilities (note 5)
9
9
Amounts recognised in statement of cash flows
2024
2023
\u20ac m
\u20ac m
Total cash outflow for leases during the year1
43
43
1. Includes amounts reported as interest expense on lease liabilities of \u20ac 9 million (2023: \u20ac 9 million) and amounts reported as principal repayments on lease liabilities
of \u20ac 34 million (2023: \u20ac 34 million). Refer to note 31.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-629": { "value": "
23\u00a0 Intangible assets and goodwill
2024
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
237
1,805
158
128
42
2,370
Additions
13
106
113
\u2014
\u2014
232
Transfers in/(out)
\u2014
105
(105)
\u2014
\u2014
\u2014
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
3
\u2014
\u2014
\u2014
3
At 31 December
216
1,899
164
128
42
2,449
Amortisation/impairment
At 1 January
214
1,201
\u2014
\u2014
30
1,445
Amortisation for the year3
11
205
\u2014
\u2014
6
222
Impairment for the year3
\u2014
\u2014
2
\u2014
\u2014
2
Amounts written-off2
(34)
(120)
(2)
\u2014
\u2014
(156)
Exchange translation adjustments
\u2014
2
\u2014
\u2014
\u2014
2
At 31 December
191
1,288
\u2014
\u2014
36
1,515
Carrying value at 31 December
25
611
164
128
6
934
2023
Software
externally
purchased
Software
internally
generated
Software
under
construction
Goodwill1
Other
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
243
1,638
149
120
40
2,190
Additions
10
91
95
8
2
206
Transfers in/(out)
\u2014
86
(86)
\u2014
\u2014
\u2014
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
237
1,805
158
128
42
2,370
Amortisation/impairment
At 1 January
221
1,005
\u2014
\u2014
24
1,250
Amortisation for the year3
9
205
\u2014
\u2014
6
220
Impairment for the year3
\u2014
1
\u2014
\u2014
\u2014
1
Amounts written-off2
(16)
(11)
\u2014
\u2014
\u2014
(27)
Exchange translation adjustments
\u2014
1
\u2014
\u2014
\u2014
1
At 31 December
214
1,201
\u2014
\u2014
30
1,445
Carrying value at 31 December
23
604
158
128
12
925
1. In 2023 the Group acquired two subsidiaries, Gaiastream Ltd (trading as Clearstream Solutions) and ParkMagic Mobile Solutions Ltd, which were not material either
individually or collectively. The Group recognised goodwill of \u20ac 8 million as a result of these transactions.
2. Relates to assets which are no longer in use with a Nil carrying value.
3. Included in \u2018Impairment and amortisation of intangible assets\u2019 in the consolidated income statement.
Future capital expenditure in relation to both intangible assets and property, plant and equipment is set out in note 24.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-634": { "value": "
24\u00a0 Property, plant and equipment
2024
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
173
39
109
370
17
443
5
1,156
Transfers in/(out)
1
\u2014
13
2
(16)
\u2014
\u2014
\u2014
Additions
1
\u2014
2
13
9
8
1
34
Transfers (to)/from held for sale
\u2014
(2)
\u2014
\u2014
\u2014
\u2014
\u2014
(2)
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Exchange translation adjustments
1
\u2014
\u2014
1
\u2014
2
\u2014
4
At 31 December
176
37
120
353
10
421
5
1,122
Depreciation/impairment
At 1 January
54
14
61
298
\u2014
171
\u2014
598
Depreciation charge for the year2
5
1
9
22
\u2014
34
2
73
Impairment charge for the year2
1
1
1
1
\u2014
\u2014
\u2014
4
Amounts written off1
\u2014
\u2014
(4)
(33)
\u2014
(32)
(1)
(70)
Transfers (to)/from held for sale
\u2014
(1)
\u2014
\u2014
\u2014
\u2014
\u2014
(1)
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
1
1
2
At 31 December
60
15
67
288
\u2014
174
2
606
Carrying value at 31 December
116
22
53
65
10
247
3
516
2023
Owned assets
Leased assets
Property
Equipment
Assets under
construction
Right-of-use assets
Total
Freehold
Long
leasehold
Leasehold
under
50 years
Property
Other
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Cost
At 1 January
168
38
107
378
9
377
4
1,081
Transfers in/(out)
2
\u2014
1
1
(4)
\u2014
\u2014
\u2014
Additions
4
1
2
15
12
57
5
96
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
173
39
109
370
17
443
5
1,156
Depreciation/impairment
At 1 January
50
13
53
298
\u2014
128
3
545
Depreciation charge for the year2
5
1
9
24
\u2014
34
1
74
Impairment charge for the year2
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Amounts written off1
(1)
\u2014
(1)
(24)
\u2014
(4)
(4)
(34)
Transfers (to)/from held for sale
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other
\u2014
\u2014
\u2014
\u2014
\u2014
13
\u2014
13
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
At 31 December
54
14
61
298
\u2014
171
\u2014
598
Carrying value at 31 December
119
25
48
72
17
272
5
558
1. Relates to assets which are no longer in use with a Nil carrying value.
2. Included in \u2018Impairment and depreciation of property, plant and equipment\u2019 in the consolidated income statement.
The net carrying value of property occupied by the Group for its own activities was \u20ac 182 million (2023: \u20ac 183 million) in relation to owned assets
and \u20ac 247 million in relation to right-of-use assets (2023: \u20ac 272 million), excluding those held as disposal groups and non-current assets held for
sale. Property leased to others by the Group had a carrying value of \u20ac 9 million (2023: \u20ac 9 million).
24\u00a0 Property, plant and equipment continued
Future capital expenditure
The table below shows future capital expenditure in relation to both property, plant and equipment and intangible assets (excluding right-of-use assets).
2024
2023
\u20ac m
\u20ac m
Estimated outstanding commitments for capital expenditure not provided for in the financial statements
2
7
Capital expenditure authorised but not yet contracted for
14
7
Leased assets
Property
The Group leases property for its offices and retail branch outlets. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. Most of these leases carry statutory renewal rights, or include an option to renew the lease for an additional period
after the end of the contract term. Where the Group is likely to exercise these options, this has been taken into account in determining the lease
liability and the right-of-use asset.
Other
The Group leases motor vehicles, ATM offsite locations and IT equipment.
Lease liabilities
A maturity analysis of lease liabilities is shown in note 31.
Amounts recognised in income statement
2024
2023
\u20ac m
\u20ac m
Depreciation expense on right-of-use assets
36
35
Interest on lease liabilities (note 5)
9
9
Amounts recognised in statement of cash flows
2024
2023
\u20ac m
\u20ac m
Total cash outflow for leases during the year1
43
43
1. Includes amounts reported as interest expense on lease liabilities of \u20ac 9 million (2023: \u20ac 9 million) and amounts reported as principal repayments on lease liabilities
of \u20ac 34 million (2023: \u20ac 34 million). Refer to note 31.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-638": { "value": "
25\u00a0 Other assets
2024
2023
\u20ac m
\u20ac m
Proceeds due from disposal of loan portfolio1
133
43
Proceeds due from the issuance of debt securities1
105
\u2014
Stockbroking client debtors2
11
21
Items in transit
114
83
Items in course of collection
35
42
Other3
77
71
Total other assets
475
260
Other assets are analysed as follows:
Less than 1 year
475
260
Greater than 1 year
\u2014
\u2014
475
260
1. ECL: Nil (2023: Nil).
2. ECL: \u20ac 1 million (2023: \u20ac 1 million).
3. Includes sundry debtors \u20ac 32 million (2023: \u20ac 37 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-637": { "value": "
25\u00a0 Other assets
2024
2023
\u20ac m
\u20ac m
Proceeds due from disposal of loan portfolio1
133
43
Proceeds due from the issuance of debt securities1
105
\u2014
Stockbroking client debtors2
11
21
Items in transit
114
83
Items in course of collection
35
42
Other3
77
71
Total other assets
475
260
Other assets are analysed as follows:
Less than 1 year
475
260
Greater than 1 year
\u2014
\u2014
475
260
1. ECL: Nil (2023: Nil).
2. ECL: \u20ac 1 million (2023: \u20ac 1 million).
3. Includes sundry debtors \u20ac 32 million (2023: \u20ac 37 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-636": { "value": "
25\u00a0 Other assets
2024
2023
\u20ac m
\u20ac m
Proceeds due from disposal of loan portfolio1
133
43
Proceeds due from the issuance of debt securities1
105
\u2014
Stockbroking client debtors2
11
21
Items in transit
114
83
Items in course of collection
35
42
Other3
77
71
Total other assets
475
260
Other assets are analysed as follows:
Less than 1 year
475
260
Greater than 1 year
\u2014
\u2014
475
260
1. ECL: Nil (2023: Nil).
2. ECL: \u20ac 1 million (2023: \u20ac 1 million).
3. Includes sundry debtors \u20ac 32 million (2023: \u20ac 37 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-635": { "value": "
25\u00a0 Other assets
2024
2023
\u20ac m
\u20ac m
Proceeds due from disposal of loan portfolio1
133
43
Proceeds due from the issuance of debt securities1
105
\u2014
Stockbroking client debtors2
11
21
Items in transit
114
83
Items in course of collection
35
42
Other3
77
71
Total other assets
475
260
Other assets are analysed as follows:
Less than 1 year
475
260
Greater than 1 year
\u2014
\u2014
475
260
1. ECL: Nil (2023: Nil).
2. ECL: \u20ac 1 million (2023: \u20ac 1 million).
3. Includes sundry debtors \u20ac 32 million (2023: \u20ac 37 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-639": { "value": "
27\u00a0 Retirement benefits
The Group operates a number of defined contribution and defined benefit schemes for employees. All defined benefit schemes are closed to future accrual.
Defined contribution
From 1 January 2014, all Group staff accrue future pension benefits on a defined contribution (\u2018DC\u2019) basis with a standard employer contribution
of\u00a010%. An additional matched employer contribution, subject to limits based on age bands of 2%, 5% or 8% is also paid into the schemes.
The amount included in operating expenses in respect of DC schemes is \u20ac 96 million (2023: \u20ac 89 million) (note 10).
Defined benefit schemes
All defined benefit schemes operated by the Group closed to future accrual no later than 31 December 2013 and staff transferred to defined
contribution schemes for future pension benefits. The most significant defined benefit schemes operated by the Group are the AIB Group Irish
Pension Scheme (\u2018the Irish scheme\u2019) and the AIB Group UK Pension Scheme (\u2018the UK scheme\u2019).
Retirement benefits for the defined benefit schemes are calculated by reference to service and final pensionable salary at 31 December 2013. The
final pensionable salary used in the calculation of this benefit for staff is based on their average pensionable salary in the period between 30\u00a0June
2009 and 31 December 2013. This calculation of benefit for each staff member will revalue between 1 January 2014 and retirement date in line
with the statutory requirement to revalue deferred benefits. There is no link to any future changes in salaries.
In the main Irish scheme, there are 15,560 members comprising 4,688 pensioners and 10,872 deferred members at 31 December 2024. 7,480
members have benefits accrued from 2007 to 2013 under a hybrid arrangement. In addition, there are 937 members comprising 162 pensioners
and 775 deferred members at 31 December 2024 in EBS Defined Benefit Schemes.
During 2024, the UK Court of Appeal upheld a ruling in respect of Virgin Media v NTL Pension Trustees II Limited, which considered the validity of
certain defined benefit scheme rule amendments made between 1997 and 2016. The Trustee with its advisers and the UK scheme actuary is
considering the possible implications of the ruling on the UK scheme. As it is too early at present to estimate the potential impact, if any, on the UK
scheme, no adjustment has been made in the financial statement for this matter.
(i) Responsibilities for governance
The Trustees of each Group pension scheme are ultimately responsible for the governance of the schemes. In respect of the Irish schemes, the
scheme actuary reviews the statutory minimum funding requirement annually. In the event of a deficit on the statutory funding basis either the
Group can meet the deficit over an agreed period through agreeing a funding proposal with the Trustees and pensions regulator or making a
contribution to meet the deficit. There are currently no funding proposals or contribution requirements in respect of the Irish schemes and the
scheme actuary's most recent review confirmed that the schemes met their statutory funding obligations. Funding arrangements for the UK
scheme are described in the Asset-liability matching strategies within this note.
(ii) Risks
Details of the pension risk to which the Group is exposed are set out in the Risk Management section on pages 233 and 234 of this report.
(iii) Valuations
Independent actuarial valuations for the Irish scheme and the UK scheme are carried out on a triennial basis by the schemes\u2019 actuary, Mercer.
The\u00a0most recent valuation of the Irish scheme was carried out at 30 June 2021 and reported the scheme to be in surplus. The next actuarial
valuation of the Irish scheme is being prepared with an effective date of 30 June 2024 with the results expected by 31 March 2025. No deficit
funding is required at this time as the Irish scheme continues to meet the minimum funding standard. The most recent valuation of the UK scheme
was carried out at\u00a031 December 2020. The next actuarial valuation of the UK scheme is being carried out for 31 December 2023 with the results
expected by 31\u00a0March\u00a02025.
(iv) Contributions
Total contributions to all defined benefit pension schemes operated by the Group in 2024 amounted to \u20ac 24 million (2023: \u20ac 24 million). There were
no contributions made to the Irish scheme in 2024 (2023: Nil). Contributions of \u00a3 18.5 million were made to the UK scheme (2023: \u00a3 18.5 million)
as part of the revised funding arrangement which was implemented in December 2019.
Total contributions to all defined benefit pension schemes operated by the Group for the year to 31 December 2025 are estimated to be \u20ac 11 million.
27\u00a0 Retirement benefits continued
(v) Financial assumptions
The following table summarises the financial assumptions adopted in the preparation of these financial statements in respect of the main schemes
at 31 December 2024 and 2023. The assumptions have been set based upon the advice of the Group\u2019s actuary.
2024
2023
Financial assumptions
%
%
Irish scheme
Rate of increase of pensions in payment
1.90
2.05
Discount rate
3.52
3.55
Inflation assumptions1
1.90
2.15
UK scheme
Rate of increase of pensions in payment2
3.20
3.00
Discount rate
5.50
4.80
Inflation assumptions (RPI)
3.10
3.00
1. The inflation assumption applies to the revaluation of deferred members\u2019 benefits up to their retirement date.
2. The assumption for pension in payment increases in line with RPI but with a floor of 0% and so is higher than the RPI assumption.
\u2013 Funding of increases in pensions in payment for the Irish scheme
The Board previously determined that the funding of discretionary increases to pensions in payment is a decision to be made by the Board each
year. A process, taking account of all relevant interests and factors was implemented by the Board. These interests and factors include: the advice
of the Actuary; the interests of the members of the scheme; the interests of the employees; the Group\u2019s financial circumstances and ability to pay;
the views of the Trustees; the Group\u2019s commercial interests and any competing obligations to the State. As a result of this process, the Group\u2019s
judgement is that a constructive obligation to fund future discretionary pension in payment increases does not exist.
The Group decided in February 2024 and 2025 that the funding of discretionary increases was not appropriate in either year in relation to the
Irish\u00a0scheme.
\u2013 Rate of increase of pensions in payment \u2013 Irish scheme
Notwithstanding the decisions by the Board not to fund discretionary increases, the Trustee of the Irish scheme awarded an increase of 3.40%
in\u00a02024 (2023: increase of 6.75%). Taking this decision by the Trustee into consideration and the financial position of the scheme, the long-term
assumption for future discretionary increases in pensions in payment continues to reflect an assessment of the Trustee\u2019s ability to grant further
discretionary increases without funding from the Group. Having taken actuarial advice, this amount was estimated to increase scheme liabilities
by\u00a0\u20ac 808 million at 31 December 2024 (31 December 2023: \u20ac 822 million). This is equivalent to a rate of 1.90% (31 December 2023: 2.05%)
for\u00a0the\u00a0long-term assumption for future discretionary increases in pensions in payment (which is the lower of the surplus available to\u00a0the Trustee
to\u00a0distribute or the long-term inflation assumption).
(vi) Demographic assumptions
Demographic assumptions include assumptions for mortality, proportions married, commutation and retirement age. The mortality assumption has
the most material impact on changes in demographic assumptions and further details on this assumption are set out below. The life expectancies
underlying the value of the scheme liabilities for the Irish and UK schemes at 31 December 2024 and 2023 are shown in the following table.
Life expectancy \u2013 years
Irish scheme
UK scheme
2024
2023
2024
2023
Retiring today age 63
Males
25.1
25.1
24.2
24.3
Females
27.0
27.0
26.2
26.2
Retiring in 10 years at age 63
Males
25.8
25.7
24.5
24.6
Females
27.8
27.7
27.2
27.2
The mortality assumptions for the Irish and UK schemes were updated in 2021 to reflect emerging market experience. The table shows that a
member of the Irish scheme retiring at age 63 on 31 December 2024 is assumed to live on average for 25.1 years for a male (24.2 years for the
UK scheme) and 27.0 years for a female (26.2 years for the UK scheme). There will be variation between members but these assumptions are
expected to be appropriate for all members. The table also shows the life expectancy for members aged 53 on 31 December 2024 who will retire
in ten years. Younger members are expected to live longer in retirement than those retiring now, reflecting a decrease in mortality rates in future
years due to advances in medical science and improvements in standards of living.
27\u00a0 Retirement benefits continued
(vii) Movement in defined benefit obligation and scheme assets
The following table sets out the movement in the defined benefit obligation and scheme assets during 2024 and 2023.
2024
2023
Defined
benefit
obligation
Fair
value of
scheme
assets
Asset
ceiling/
minimum
funding1
Net
defined
benefit
(liabilities)
assets
Defined
benefit
obligation
Fair
value of
scheme
assets
Asset
ceiling/
minimum
funding1
Net
defined
benefit
(liabilities)
assets
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January
(5,023)
5,690
(650)
17
(4,850)
5,454
(607)
(3)
Included in profit or loss
Past service cost
(1)
\u2014
\u2014
(1)
(2)
\u2014
\u2014
(2)
Interest (cost)/income
(183)
209
(23)
3
(205)
232
(26)
1
Administration costs
\u2014
(5)
\u2014
(5)
\u2014
(4)
\u2014
(4)
(184)
204
(23)
(3)
(207)
228
(26)
(5)
Included in other comprehensive income
Remeasurement loss:
\u2013\u00a0 Actuarial gain/(loss) arising from:
\u2013\u00a0 Experience adjustments2
(45)
\u2014
\u2014
(45)
(96)
\u2014
\u2014
(96)
\u2013\u00a0 Changes in demographic assumptions
1
\u2014
\u2014
1
17
\u2014
\u2014
17
\u2013\u00a0 Changes in financial assumptions
84
\u2014
\u2014
84
(95)
\u2014
\u2014
(95)
\u2013\u00a0 Return on scheme assets excluding
interest income
\u2014
(117)
\u2014
(117)
\u2014
189
\u2014
189
\u2013\u00a0 Asset ceiling/minimum funding adjustments
\u2014
\u2014
59
59
\u2014
\u2014
(17)
(17)
Total remeasurement loss
(18)
3
(2)
3
Translation adjustment on
non-Euro schemes
(36)
38
\u2014
2
(12)
15
\u2014
3
4
(79)
59
(16)
(186)
204
(17)
1
Other
Contributions by employer
\u2014
24
\u2014
24
\u2014
24
\u2014
24
Benefits paid
253
(253)
\u2014
\u2014
220
(220)
\u2014
\u2014
253
(229)
\u2014
24
220
(196)
\u2014
24
At 31 December
(4,950)
5,586
(614)
22
(5,023)
5,690
(650)
17
31 December
31 December
2024
2023
\u20ac m
\u20ac m
Recognised on the statement of financial position as:
Retirement benefit assets
UK scheme
20
21
Other schemes
11
10
Total retirement benefit assets
31
31
Retirement benefit liabilities
Irish scheme
\u2014
\u2014
EBS scheme
\u2014
\u2014
Other schemes
(9)
(14)
Total retirement benefit liabilities
(9)
(14)
Net pension surplus
22
17
1. In recognising the net surplus or deficit on a pension scheme, the funded status of each scheme is adjusted to reflect any minimum funding requirement and any
ceiling on the amount that the sponsor has a right to recover from a scheme.
2. The effects of differences between the previous actuarial assumptions and what has actually occurred.
3. After tax \u20ac 13 million (2023: \u20ac 2 million).
27\u00a0 Retirement benefits continued
Scheme assets
The following table sets out an analysis of the scheme assets:
2024
2023
\u20ac m
\u20ac m
Cash and cash equivalents
148
196
Quoted equity instruments
Basic materials
28
56
Consumer goods
51
92
Consumer services
146
121
Energy
38
93
Financials
150
212
Healthcare
102
152
Industrials
140
134
Technology
267
239
Telecoms
23
88
Utilities
28
40
Real estate
22
\u2014
Total quoted equity instruments
995
1,227
Quoted debt instruments
Corporate bonds
744
721
Government bonds
1,057
1,032
Total quoted debt instruments
1,801
1,753
Real estate1,2
278
300
Derivatives
(14)
9
Quoted investment funds
Alternatives
38
26
Cash
2
11
Equity
210
187
Fixed interest
110
109
Forestry
49
48
Liability Driven Investment
1,170
978
Multi-asset
6
10
Total quoted investment funds
1,585
1,369
Mortgage backed securities2
115
139
Insurance contracts3
678
697
Fair value of scheme assets at 31 December
5,586
5,690
1. Located in Europe.
2. A quoted market price in an active market is not available.
3. Further details on these contracts are set out in the section \u2018Asset-liability matching strategies\u2019 within this note.
27\u00a0 Retirement benefits continued
Sensitivity analysis for principal assumptions used to measure scheme liabilities
There are inherent uncertainties surrounding the assumptions adopted in calculating the liabilities of the pension schemes. Set out in the table
below is a sensitivity analysis of the key assumptions for the Irish scheme and the UK scheme at 31 December 2024. A sensitivity analysis for the
rate of increase of pensions in payment is not provided for the Irish scheme, as this rate is dependent on the surplus available to the Trustee to
distribute and the advice of the actuary (see page 311). The inflation sensitivities for the UK Scheme are a combination of those relating to
deferred members and pensioners.
In the table below, changes in assumptions are independent of each other (i.e. the effect of the reflected change in the discount rate assumes that
there has been no change in the rate of mortality assumption and vice versa).
2024
2023
Irish scheme
defined benefit
obligation
UK scheme
defined benefit
obligation
Irish scheme
defined benefit
obligation
UK scheme
defined benefit
obligation
Increase
Decrease
Increase
Decrease
Increase
Decrease
Increase
Decrease
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Discount rate (0.25% movement)
(101)
106
(19)
18
(105)
113
(20)
21
Inflation (0.25% movement)
39
(37)
17
(19)
42
(40)
20
(19)
Future mortality (1 year change in life expectancy)
106
(106)
16
(18)
107
(107)
18
(18)
Maturity of the defined benefit obligation
The weighted average duration of the Irish scheme at 31 December 2024 is 13 years (2023: 14 years) and of the UK scheme at 31 December
2024 is 11 years (2023: 12 years).
Asset-liability matching strategies
UK scheme
The Group and the Trustee began a substantial de-risking process of the UK scheme in 2019. An initial transaction entered into involved the
acquisition of two\u00a0insurance contracts from Legal and General Assurance Society ('LGAS') using the majority of the assets of the UK scheme.
These insurance contracts are: a pensioner buy-in contract in respect of the pensioner members and an assured payment policy ('APP') in respect
of deferred members. The ultimate obligation to pay the members benefits still remains with the scheme.
The pensioner buy-in contract removes financial and demographic risk attaching to the current UK pensioners. This pensioner buy-in contract is
effectively a qualifying insurance contract, and exactly matches the amount and timing of the benefits covered. Accordingly, the fair value of the
pensioner buy-in contract is set equal to the corresponding value of the liabilities, using the same assumptions.
The APP significantly reduces the inflation and interest rate risk attaching to UK deferred members although demographic risks remain. The APP
can (at the UK Trustee\u2019s election) be partially surrendered on an annual basis for the purpose of wholly or partially funding buy-in of further
tranches of deferred members over a defined period of time. There have been three APP conversions resulting in the purchase of additional
tranches of deferred and pensioner buy-ins. This has removed exposure to the risks not covered by the APP over time. The fair value of the APP is
measured as the estimated cost of purchasing the contract on the open market. Since the initial de-risking transaction in 2019, additional members
(including deferred and subsequent retirees) have been added to the buy-in policy, with a partial surrender of a portion of the APP to fund the cost.
The Group agreed with the scheme Trustee a revised funding arrangement for the UK scheme to support the purchase of the pensioner buy-in
contract and the APP. Under this funding arrangement, the Group made payments of \u00a318.5 million in 2024 and expects to make a payment of
\u00a3 9.5 million in 2025. This amount is what is expected to\u00a0be required in combination with surrendering the final portion of the APP to fully secure all
liabilities under the buy-in policy of the scheme based on latest estimates from LGAS, plus an amount for estimated Trustee expenses. This
payment and any other related costs are subject to\u00a0change prior to finalisation.
Irish scheme
The Irish scheme continued to de-risk in 2024, with further sales of equities and additional investments in its Liability Driven Investment (\u2018LDI\u2019)
portfolio, which is in place to hedge its interest rate and inflation risk. The LDI portfolio comprises a mixture of nominal bonds, inflation linked bonds
and interest rate and inflation derivatives.
Other long term employee benefits
Other long term employee benefits include additional benefits which the Group provides to employees who suffer prolonged periods of sickness,
subject to the qualifying terms of the insurer. It provides for the partial replacement of income in the event of illness or injury resulting in the
employee\u2019s long term absence from work.
Furthermore, on the death of an employee before their normal retirement date, the Group has in place insurance policies to cover the additional
financial costs to the Group under the terms of the schemes.
In 2024, the Group contributed \u20ac 11 million (2023: \u20ac 11 million) towards insuring these benefits which are included in 'Operating expenses' (note\u00a010).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-641": { "value": "
28\u00a0 Deposits by central banks and banks
2024
2023
\u20ac m
\u20ac m
Central Bank Borrowings \u2013 secured
6
288
Central Bank Borrowings \u2013 unsecured
\u2014
452
6
740
Other Bank Borrowings \u2013 unsecured
830
1,040
Total deposits by central banks and banks
836
1,780
Deposits by central banks and banks include cash collateral at 31 December 2024 of \u20ac 803 million (2023: \u20ac 1,018 million) received from derivative
counterparties in relation to net derivative positions and from repurchase agreement counterparties.
Financial assets pledged
Financial assets pledged for secured borrowings and providing access to future funding facilities with central banks and banks are detailed in the
following table:
2024
2023
Central
banks
Banks
Total
Central
banks
Banks
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Total carrying value of financial assets pledged
87
\u2014
87
436
18
454
Of which:
Government securities
9
\u2014
9
\u2014
18
18
Other securities1
78
\u2014
78
436
\u2014
436
1. Securities pledged as collateral comprise third party securities held by the Group and covered bonds secured on pools of residential mortgages that have been
issued by and are held by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-640": { "value": "
28\u00a0 Deposits by central banks and banks
2024
2023
\u20ac m
\u20ac m
Central Bank Borrowings \u2013 secured
6
288
Central Bank Borrowings \u2013 unsecured
\u2014
452
6
740
Other Bank Borrowings \u2013 unsecured
830
1,040
Total deposits by central banks and banks
836
1,780
Deposits by central banks and banks include cash collateral at 31 December 2024 of \u20ac 803 million (2023: \u20ac 1,018 million) received from derivative
counterparties in relation to net derivative positions and from repurchase agreement counterparties.
Financial assets pledged
Financial assets pledged for secured borrowings and providing access to future funding facilities with central banks and banks are detailed in the
following table:
2024
2023
Central
banks
Banks
Total
Central
banks
Banks
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Total carrying value of financial assets pledged
87
\u2014
87
436
18
454
Of which:
Government securities
9
\u2014
9
\u2014
18
18
Other securities1
78
\u2014
78
436
\u2014
436
1. Securities pledged as collateral comprise third party securities held by the Group and covered bonds secured on pools of residential mortgages that have been
issued by and are held by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-642": { "value": "
29\u00a0 Customer accounts
2024
2023
\u20ac m
\u20ac m
Current accounts
62,657
62,928
Demand deposits
31,126
32,083
Time deposits
16,100
9,771
109,883
104,782
Of which:
Non-interest bearing current accounts
58,454
58,643
Interest bearing deposits, current accounts and short term borrowings
51,429
46,139
Total customer accounts
109,883
104,782
Amounts include:
Due to equity accounted investments
320
303
Cash collateral received from derivative counterparties in relation to net derivative positions
67
94
At 31 December 2024, the Group\u2019s five largest customer deposits amounted to 1% (2023: 1%) of total customer accounts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-643": { "value": "
30\u00a0 Debt securities in issue
2024
2023
\u20ac m
\u20ac m
Issued by AIB Group plc
Euro Medium Term Note Programme
5,245
5,901
Global Medium Term Note Programme
(a)
2,628
2,495
7,873
8,396
Issued by subsidiaries
Credit linked notes
(b)
95
\u2014
Bonds and other medium term notes
27
27
Commercial paper
(c)
837
\u2014
959
27
Total debt securities in issue
8,832
8,423
2024
2023
Analysis of movements in debt securities in issue
\u20ac m
\u20ac m
At 1 January
8,423
7,203
Issued during the year
4,011
2,431
Matured
(3,886)
(1,382)
Amortisation
22
\u2014
Other1
262
171
At 31 December
8,832
8,423
1. Includes a positive fair value hedge adjustment of \u20ac 70 million (2023: positive \u20ac 254 million), positive foreign exchange of\u00a0\u20ac\u00a0192\u00a0million (2023: negative \u20ac\u00a083\u00a0million)
(a) Global Medium Term Note Programme
On 28 March 2024, AIB Group plc issued $ 1 billion Senior Unsecured 5.871% Notes maturing on 28 March 2035. The notes bear interest on the
outstanding nominal amount, payable semi-annually in arrears on 28 March and 28 September each year, commencing on 30 September 2024
up\u00a0to and including the maturity date.
(b) Credit linked notes
On 19 November 2024, the Group executed a synthetic credit risk transfer transaction (Significant Risk Transfer (\u2018SRT\u2019)) on a reference portfolio of
\u20ac1 billion corporate loans. The transaction involves the issuance of two classes of credit linked notes totalling \u20ac 97.5 million (including transaction
costs of \u20ac\u00a02.5\u00a0million), with the scheduled termination of the protection provided by the notes expected in 2032. Each class of notes bears interest
on the\u00a0outstanding nominal amount of such class, payable quarterly in arrears on 28 January, April, July and October each year, commencing on
28\u00a0April 2025.
(c) Commercial paper
Allied Irish Banks, p.l.c. introduced a short-term commercial paper programme in 2024. This programme is used as an additional liquidity mechanism
whereby short-term debt, with maturities of typically less than six months, is issued in EUR, GBP and USD.
All the issuances by AIB Group plc are initially eligible to meet the Group\u2019s MREL requirements. These instruments are redeemable for tax or for
regulatory reasons, subject to the permission of the relevant regulation authority", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-644": { "value": "
31\u00a0 Lease liabilities
Analysis of movements in lease liabilities
2024
2023
\u20ac m
\u20ac m
At 1 January
282
257
Lease payments1
(43)
(43)
Interest expense1
9
9
Additions
9
59
Early terminations
\u2014
(1)
Net remeasurements
\u2014
\u2014
Foreign exchange translation adjustments
1
1
At 31 December
258
282
1. Repayment of principal portion of the lease liabilities amounted to \u20ac 34 millio n ( 2023: \u20ac 34 million) ( i.e. lease payments net of interest expense).
2024
2023
Maturity analysis \u2013 contractual undiscounted cash flows:
\u20ac m
\u20ac m
Not later than one year
41
43
Later than one year and not later than five years
127
136
Later than five years
160
181
Total undiscounted lease liabilities at end of year
328
360
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-647": { "value": "
32\u00a0 Other liabilities
2024
2023
\u20ac m
\u20ac m
Notes in circulation
33
34
Items in transit
65
108
Creditors
40
36
Stockbroking client creditors
11
18
Bank drafts
252
271
Items in course of collection
321
284
Other1
389
331
Total other liabilities
1,111
1,082
Other liabilities are analysed as follows:
Less than 1 year
1,047
1,020
Greater than 1 year
64
62
1,111
1,082
1. Includes invoice discounting credit balances on customer accounts \u20ac 120 million (2023: \u20ac 73 million) and debt securities awaiting settlement \u20ac 32 million (2023: Nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-646": { "value": "
32\u00a0 Other liabilities
2024
2023
\u20ac m
\u20ac m
Notes in circulation
33
34
Items in transit
65
108
Creditors
40
36
Stockbroking client creditors
11
18
Bank drafts
252
271
Items in course of collection
321
284
Other1
389
331
Total other liabilities
1,111
1,082
Other liabilities are analysed as follows:
Less than 1 year
1,047
1,020
Greater than 1 year
64
62
1,111
1,082
1. Includes invoice discounting credit balances on customer accounts \u20ac 120 million (2023: \u20ac 73 million) and debt securities awaiting settlement \u20ac 32 million (2023: Nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-645": { "value": "
32\u00a0 Other liabilities
2024
2023
\u20ac m
\u20ac m
Notes in circulation
33
34
Items in transit
65
108
Creditors
40
36
Stockbroking client creditors
11
18
Bank drafts
252
271
Items in course of collection
321
284
Other1
389
331
Total other liabilities
1,111
1,082
Other liabilities are analysed as follows:
Less than 1 year
1,047
1,020
Greater than 1 year
64
62
1,111
1,082
1. Includes invoice discounting credit balances on customer accounts \u20ac 120 million (2023: \u20ac 73 million) and debt securities awaiting settlement \u20ac 32 million (2023: Nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-648": { "value": "
33\u00a0 Subordinated liabilities and other capital instruments
2024
2023
\u20ac m
\u20ac m
Dated loan capital \u2013 European Medium Term Note Programme:
Issued by AIB Group plc
\u20ac 500 million Subordinated Tier 2 Notes due 2029, Callable 2024
(a)
\u2014
484
\u20ac 1 billion Subordinated Tier 2 Notes due 2031, Callable 2026
(b)
963
928
\u20ac 650 million Subordinated Tier 2 Notes due 2035, Callable 2030
(c)
662
\u2014
1,625
1,412
Issued by subsidiaries
\u20ac 500m Callable Step-up Floating Rate Notes due October 2017
\u2013 nominal value \u20ac 0.3 million (maturity extended to 2035 as a result of the Subordinated Liabilities Order)
(d)
\u2014
13
\u00a3 368m 12.5% Subordinated Notes due June 2019
\u2013 nominal value \u00a3 2.715 million (maturity extended to 2035 as a result of the Subordinated Liabilities Order)
(d)
2
47
\u00a3 500m Callable Fixed/Floating Rate Notes due March 2025
\u2013 nominal value \u00a3 0.136 million (maturity extended to 2035 as a result of the Subordinated Liabilities Order)
(d)
\u2014
1
2
61
Total subordinated liabilities and other capital instruments
1,627
1,473
Maturity of dated loan capital
2024
2023
\u20ac m
\u20ac m
Dated loan capital outstanding is repayable as follows:
5 years or more
1,627
1,473
Dated loan capital
The dated loan capital in this section is subordinated in right of payment to senior creditors, including depositors, of the respective issuing entities.
Following the implementation in Ireland of the EU (Bank Recovery and Resolution) Regulations 2015, these notes are loss absorbing at the point
of non-viability.
(a) \u20ac 500 million Subordinated Tier 2 Notes due 2029, Callable 2024
On 19 November 2019, AIB Group plc issued \u20ac 500 million Subordinated Tier 2 Notes due 2029, Callable 2024. Following a tender offer in May 2024,
\u20ac 406 million of these notes were repurchased. The remaining \u20ac 94 million was redeemed in November 2024 on the optional redemption date.
(b) \u20ac 1 billion Subordinated Tier 2 Notes due 2031, Callable 2026
On 30 September 2020 , AIB Group plc issued \u20ac 1 billion Subordinated Tier 2 Notes due 2031, Callable 2026. These notes mature on 30 May 2031
but may be redeemed in whole, but not in part, at the option of the Group on the optional redemption date on 30 May 2026, subject to the approval
of the regulatory authorities, with approval being conditional on meeting the requirements of the EU Capital Requirements Regulation. The notes
bear interest on the outstanding nominal amount at a fixed rate of 2.875%, payable annually in arrears on 30 May each year. The interest rate will
be reset on 30 May 2026 to Euro 5 year Mid Swap rate plus the initial margin of 330 basis points.
(c) \u20ac 650 million Subordinated Tier 2 Notes due 2035, Callable 2030
On 20 May 2024, AIB Group plc issued \u20ac 650 million Subordinated Tier 2 Notes due 2035, Callable 2030. These notes mature on 20 May 2035 but
may be redeemed in whole, but not in part, at the option of the Group on the optional redemption date on 20 May 2030, subject to the approval of
the regulatory authorities, with approval being conditional on meeting the requirements of the EU Capital Requirements Regulation. The notes
bear interest on the outstanding nominal amount at a fixed rate of 4.625%, payable annually in arrears on 20 May each year. The interest rate will
be reset on 20 May 2030 to Euro 5 year Mid Swap rate plus the initial margin of 190 basis points.
(d) Other dated subordinated loan capital
Following liability management exercises and the Subordinated Liabilities Order (\u2018SLO\u2019) in 2011, residual balances remained on the dated loan
capital instruments above. The SLO, which was effective from 22 April 2011, changed the terms of all of those outstanding dated loan capital
instruments. The original liabilities were derecognised and new liabilities were recognised, with their initial measurement based on the fair value
at\u00a0the SLO effective date. The contractual maturity date changed to 2035 as a result of the SLO, and payment of coupons became optional at the
discretion of the Group. The Board of Allied Irish Banks, p.l.c. has considered the matter and as at the date of this report, the Group\u2019s position is
that coupons are not paid on these instruments. These instruments will amortise to their nominal value in the period to their maturity in 2035. In
December 2024, Allied Irish Banks, p.l.c. repurchased an aggregate nominal amount of the following Notes at a discount to par: \u20ac 25 million of the
\u20ac 500 million Callable Subordinated Step-Up Floating Rate Notes due 2035, \u00a3 76 million of the \u00a3 368 million 12.5 % Subordinated Notes due 2035
and \u00a3 1 million of the \u00a3 500 million Subordinated Callable Fixed/Floating Rate Notes due 2035.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-649": { "value": "
34\u00a0 Provisions for liabilities and commitments
2024
Legal
claims
Customer
redress
Other
provisions
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January 2024
23
82
33
138
Charged to income statement
3
68
7
78
1
Released to income statement
(1)
(16)
(5)
(22)
1
Provisions utilised
(2)
(40)
(6)
(48)
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
At 31 December 2024
23
94
29
146
2
ECLs on loan commitments and financial guarantees contracts
At 1 January 2024
59
Net charge to income statement
(3)
3
Disposals
\u2014
Exchange translation adjustments
1
At 31 December 2024
57
Total provisions for liabilities and commitments
203
4
2023
Legal
claims
Customer
redress
Other
provisions
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January 2023
29
167
66
262
Charged to income statement
11
92
6
109
1
Released to income statement
(4)
(32)
(5)
(41)
1
Provisions utilised
(13)
(145)
(35)
(193)
Exchange translation adjustments
\u2014
\u2014
1
1
At 31 December 2023
23
82
33
138
2
ECLs on loan commitments and financial guarantees contracts
At 1 January 2023
78
Net charge to income statement
(17)
3
Disposals
(1)
Exchange translation adjustments
(1)
At 31 December 2023
59
Total provisions for liabilities and commitments
197
4
1. Included in note 10.
2. Amounts expected to be settled within one year are \u20ac 99 million (31 December 2023: \u20ac 92 million). Amounts expected to be settled outside of one year amount to
\u20ac\u00a047\u00a0million (31 December 2023: \u20ac 46 million).
3. Included in note 11.
4. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
The ECL allowance on loan commitments and financial guarantee contracts are presented as a provision in the balance sheet (i.e. as a liability
under IFRS 9) and separate from the ECL allowance on financial assets. For details of the geographic concentration of\u00a0contingent liabilities and
commitments and internal credit ratings, see pages 204 and 215 in the \u2018Risk management\u2019 section of this report.
Legal claims
In the ordinary course of business, legal claims (claims which have resulted in legal cases commencing in the Courts) are frequently served on the
Group. There is always a level of uncertainty with legal claims given the range of potential outcomes. The Group considers many factors, including
the background facts of the legal claim, legal advice and the stage of the legal claim to determine the appropriate provision. The Group has recorded
a provision of \u20ac 23 million at 31 December 2024 (31 December 2023: \u20ac 23 million) in relation to ongoing legal claims against the Group.
Customer redress
Customer redress relates to remediation payments to customers and associated costs for certain legacy matters such as investment property funds; the
2020 Financial Services and Pensions Ombudsman decision; and other customer redress provisions. The provision represents the Group\u2019s best estimate
of the costs of remediation of any remaining impacted customers, addressing customer appeals and closing out other related matters. Due to the complex
nature of these legacy matters, they can take some time to resolve and the final outcome may be higher or lower depending on the finalisation of all
associated matters. In 2024 the provision was further reassessed, primarily as a result of additional information that was obtained during the year, and as a
result the Group recognised a net income statement charge of \u20ac 52 million.
Other provisions
Other provisions, none of which are individually material, include provisions for right-of-use commitments, onerous contracts and other
miscellaneous provisions.
39\u00a0 Contingent liabilities and commitments
In the normal course of business, the Group is a party to financial instruments with off-balance sheet risk to meet the financing needs of customers. These
instruments involve, to varying degrees, elements of credit risk which are not reflected in the consolidated statement of financial position. Credit risk is
defined as the possibility of sustaining a loss because the other party to a financial instrument fails to perform in accordance with the terms of the contract.
The Group\u2019s maximum exposure to credit loss under contingent liabilities and commitments to extend credit, in the event of non-performance by\u00a0the
other party where all counterclaims, collateral or security prove valueless, is represented by the contractual amounts of those instruments. The Group
uses the same credit control and risk management policies in undertaking off-balance sheet commitments as it does for \u2018on-balance sheet lending\u2019.
The following table gives the nominal or contract amounts of contingent liabilities and commitments:
Contract amount
2024
2023
\u20ac m
\u20ac m
Contingent liabilities1 \u2013 credit related
Guarantees and assets pledged as collateral security:
Guarantees and irrevocable letters of credit
952
829
Other contingent liabilities
24
28
976
857
Commitments2
Documentary credits and short term trade-related transactions
276
208
Undrawn formal standby facilities, credit lines and other commitments to lend:
Less than 1 year
10,443
9,827
1 year and over
6,104
6,101
16,823
16,136
Total contingent liabilities and commitments
17,799
16,993
1. Contingent liabilities are off-balance sheet products and include guarantees, irrevocable letters of credit and other contingent liability products.
2. A commitment is an off-balance sheet product where there is an agreement to provide an undrawn credit facility.
For details of the geographic concentration of contingent liabilities and commitments and internal credit ratings, see pages 204 and 215 in the Risk
management section of this report. Provisions for ECLs on loan commitments and financial guarantee contracts are set out in note 34.
Legal proceedings
The\u2008Group, in the course of its business, is frequently involved in litigation cases. However, it is not, nor has been involved in, nor are there, so far
as the Group is aware, (other than as set out in the following paragraphs), pending or threatened by or against the Group any legal or arbitration
proceedings, including governmental proceedings, which may have, or have had during the previous twelve months, a material effect on the
financial position, profitability or cash flows of the\u2008Group.
Specifically, litigation has been served on the Group by customers that are pursuing claims in relation to tracker mortgages. Customers have also
lodged complaints to the Financial Services and Pensions Ombudsman (\u2018FSPO\u2019) in\u00a0relation to tracker mortgages issues.
Further claims may also be served in the future in relation to tracker mortgages. The Group will also receive further rulings by the FSPO in relation
to complaints concerning tracker mortgages.
Based on the facts currently known and the current stages that the litigation and the FSPO\u2019s complaints process is at, it is not practicable at this
time to predict the final outcome of this litigation/FSPO complaints, nor the timing and possible impact on the Group.
TARGET-Ireland \u2013 Gross Settlement System
TARGET Services have been developed to ensure the free flow of cash, securities and collateral across Europe. The TARGET-Ireland system is a
real time gross settlement system for large volume interbank payments in Euro. On 16 March 2023, as part of its participation in TARGET-Ireland,
Allied Irish Banks, p.l.c. (\u2018AIB\u2019) entered a deed of charge in favour of the Central Bank of Ireland (\u2018CBI\u2019). This charge gives the CBI a first floating
charge security over all present and future credit balances in AIB\u2019s TARGET-Ireland Accounts to secure all liabilities of AIB to the CBI in connection
with AIB\u2019s participation in TARGET-Ireland.
In addition, the CBI has provided AIB with a credit line facility for intra-day credit in TARGET2-Ireland (now TARGET-Ireland) in relation to
Eurosystem Operations. In connection with this, AIB on 7 April 2014, provided the CBI with a fixed charge security over AIB\u2019s eligible assets (as
identified by the CBI) which are held in a designated collateral account and also a floating charge security over other eligible assets of AIB.
AIB cannot, without the prior written consent of the CBI:
\u2022 Create or attempt to create or permit to arise or subsist any encumbrance on or over this charged property or any part of it; or
\u2022 Otherwise than in the ordinary course of business, sell, transfer, lend or otherwise dispose of or deal in the property or assets subject to the\u00a0
charges or any part of it.\u00a0
The financial assets pledged as collateral, in relation to the first fixed charge, are included in the disclosure in note 28 for financial assets pledged.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-650": { "value": "
34\u00a0 Provisions for liabilities and commitments
2024
Legal
claims
Customer
redress
Other
provisions
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January 2024
23
82
33
138
Charged to income statement
3
68
7
78
1
Released to income statement
(1)
(16)
(5)
(22)
1
Provisions utilised
(2)
(40)
(6)
(48)
Exchange translation adjustments
\u2014
\u2014
\u2014
\u2014
At 31 December 2024
23
94
29
146
2
ECLs on loan commitments and financial guarantees contracts
At 1 January 2024
59
Net charge to income statement
(3)
3
Disposals
\u2014
Exchange translation adjustments
1
At 31 December 2024
57
Total provisions for liabilities and commitments
203
4
2023
Legal
claims
Customer
redress
Other
provisions
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At 1 January 2023
29
167
66
262
Charged to income statement
11
92
6
109
1
Released to income statement
(4)
(32)
(5)
(41)
1
Provisions utilised
(13)
(145)
(35)
(193)
Exchange translation adjustments
\u2014
\u2014
1
1
At 31 December 2023
23
82
33
138
2
ECLs on loan commitments and financial guarantees contracts
At 1 January 2023
78
Net charge to income statement
(17)
3
Disposals
(1)
Exchange translation adjustments
(1)
At 31 December 2023
59
Total provisions for liabilities and commitments
197
4
1. Included in note 10.
2. Amounts expected to be settled within one year are \u20ac 99 million (31 December 2023: \u20ac 92 million). Amounts expected to be settled outside of one year amount to
\u20ac\u00a047\u00a0million (31 December 2023: \u20ac 46 million).
3. Included in note 11.
4. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
The ECL allowance on loan commitments and financial guarantee contracts are presented as a provision in the balance sheet (i.e. as a liability
under IFRS 9) and separate from the ECL allowance on financial assets. For details of the geographic concentration of\u00a0contingent liabilities and
commitments and internal credit ratings, see pages 204 and 215 in the \u2018Risk management\u2019 section of this report.
Legal claims
In the ordinary course of business, legal claims (claims which have resulted in legal cases commencing in the Courts) are frequently served on the
Group. There is always a level of uncertainty with legal claims given the range of potential outcomes. The Group considers many factors, including
the background facts of the legal claim, legal advice and the stage of the legal claim to determine the appropriate provision. The Group has recorded
a provision of \u20ac 23 million at 31 December 2024 (31 December 2023: \u20ac 23 million) in relation to ongoing legal claims against the Group.
Customer redress
Customer redress relates to remediation payments to customers and associated costs for certain legacy matters such as investment property funds; the
2020 Financial Services and Pensions Ombudsman decision; and other customer redress provisions. The provision represents the Group\u2019s best estimate
of the costs of remediation of any remaining impacted customers, addressing customer appeals and closing out other related matters. Due to the complex
nature of these legacy matters, they can take some time to resolve and the final outcome may be higher or lower depending on the finalisation of all
associated matters. In 2024 the provision was further reassessed, primarily as a result of additional information that was obtained during the year, and as a
result the Group recognised a net income statement charge of \u20ac 52 million.
Other provisions
Other provisions, none of which are individually material, include provisions for right-of-use commitments, onerous contracts and other
miscellaneous provisions.", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-653": { "value": "
35\u00a0 Share capital
The following table shows the authorised and fully paid issued share capital:
31 December 2024
31 December 2023
Number of
shares
Number of
shares
m
\u20ac m
m
\u20ac m
Authorised
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
4,000.0
2,500
4,000.0
2,500
Issued and fully paid
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
2,328.4
1,455
2,618.7
1,637
All AIB Group plc ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting.
Movement in ordinary shares
The following table shows the movement in the number of ordinary shares:
2024
2023
Number of
shares
Number of
shares
m
m
At 1 January
2,618.7
2,673.4
Repurchase and cancellation of shares1,2
(290.3)
(54.7)
At 31 December
2,328.4
2,618.7
1. In May and September 2024, AIB Group plc completed directed share buybacks from the Minister for Finance. These buybacks resulted in the repurchase of
290,061,315 ordinary shares with a nominal value of \u20ac\u00a00.625 each for a total consideration of \u20ac 1,499 million. The Group incurred costs of \u20ac 2 million in relation to the
directed share buybacks. Following repurchase, these shares\u00a0were cancelled and \u20ac 182 million, representing the aggregate nominal value of the acquired shares,
was transferred from share capital to capital redemption reserves.
2. In October 2024, following the implementation of an Odd-lot Offer, AIB Group plc purchased a total of 253,765 ordinary shares with a nominal value of \u20ac\u00a00.625 each
for a total consideration of \u20ac 1.4 million. Following repurchase, these shares were cancelled and \u20ac 0.2 million, representing the aggregate nominal value of the
acquired shares, was transferred from share capital to capital redemption reserves.
Warrants
In 2017, warrants were issued to the Minister for Finance to subscribe for 271,166,685 ordinary shares of AIB Group plc representing 9.99% of the
issued share capital at the time (31 December 2024: 11.65%). The exercise price for the warrants was originally set at 200% of the Offer Price of
\u20ac 4.40 per ordinary share, the Offer Price being the price in Euro per ordinary share which was payable by investors under the terms of the initial
public offering. In accordance with the terms of the warrants, the exercise price has been adjusted following various share buybacks undertaken
by\u00a0AIB Group plc in recent years (including the directed share buybacks and the Odd-lot Offer completed in 2024) and is now\u00a0\u20ac\u00a07.455 per share.
In accordance with the terms of the Warrant Agreement, no cash consideration was payable by the Minister to AIB Group plc in respect of the
issue of the warrants.
Structure of the Company\u2019s share capital
The following table shows the structure of the Company\u2019s share capital:
31 December 2024
31 December 2023
Authorised
share capital
%
Issued share
capital
%
Authorised
share capital
%
Issued share
capital
%
Class of share
Ordinary share capital
100
100
100
100
Capital resources
The following table shows the Group\u2019s capital resources:
31 December
2024
2023
\u20ac m
\u20ac m
Equity1
15,427
15,069
Dated capital notes (note 33)
1,627
1,473
Total capital resources
17,054
16,542
1. Includes other equity interests of \u20ac 1,239 million (2023: \u20ac1,115 million), for further details see note 36.
The objectives of the Group\u2019s capital management policy are to at all times comply with regulatory capital requirements and to ensure that the
Group has sufficient capital to cover the current and future risk inherent in its business and to support its future development.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-652": { "value": "
35\u00a0 Share capital
The following table shows the authorised and fully paid issued share capital:
31 December 2024
31 December 2023
Number of
shares
Number of
shares
m
\u20ac m
m
\u20ac m
Authorised
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
4,000.0
2,500
4,000.0
2,500
Issued and fully paid
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
2,328.4
1,455
2,618.7
1,637
All AIB Group plc ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting.
Movement in ordinary shares
The following table shows the movement in the number of ordinary shares:
2024
2023
Number of
shares
Number of
shares
m
m
At 1 January
2,618.7
2,673.4
Repurchase and cancellation of shares1,2
(290.3)
(54.7)
At 31 December
2,328.4
2,618.7
1. In May and September 2024, AIB Group plc completed directed share buybacks from the Minister for Finance. These buybacks resulted in the repurchase of
290,061,315 ordinary shares with a nominal value of \u20ac\u00a00.625 each for a total consideration of \u20ac 1,499 million. The Group incurred costs of \u20ac 2 million in relation to the
directed share buybacks. Following repurchase, these shares\u00a0were cancelled and \u20ac 182 million, representing the aggregate nominal value of the acquired shares,
was transferred from share capital to capital redemption reserves.
2. In October 2024, following the implementation of an Odd-lot Offer, AIB Group plc purchased a total of 253,765 ordinary shares with a nominal value of \u20ac\u00a00.625 each
for a total consideration of \u20ac 1.4 million. Following repurchase, these shares were cancelled and \u20ac 0.2 million, representing the aggregate nominal value of the
acquired shares, was transferred from share capital to capital redemption reserves.
Warrants
In 2017, warrants were issued to the Minister for Finance to subscribe for 271,166,685 ordinary shares of AIB Group plc representing 9.99% of the
issued share capital at the time (31 December 2024: 11.65%). The exercise price for the warrants was originally set at 200% of the Offer Price of
\u20ac 4.40 per ordinary share, the Offer Price being the price in Euro per ordinary share which was payable by investors under the terms of the initial
public offering. In accordance with the terms of the warrants, the exercise price has been adjusted following various share buybacks undertaken
by\u00a0AIB Group plc in recent years (including the directed share buybacks and the Odd-lot Offer completed in 2024) and is now\u00a0\u20ac\u00a07.455 per share.
In accordance with the terms of the Warrant Agreement, no cash consideration was payable by the Minister to AIB Group plc in respect of the
issue of the warrants.
Structure of the Company\u2019s share capital
The following table shows the structure of the Company\u2019s share capital:
31 December 2024
31 December 2023
Authorised
share capital
%
Issued share
capital
%
Authorised
share capital
%
Issued share
capital
%
Class of share
Ordinary share capital
100
100
100
100
Capital resources
The following table shows the Group\u2019s capital resources:
31 December
2024
2023
\u20ac m
\u20ac m
Equity1
15,427
15,069
Dated capital notes (note 33)
1,627
1,473
Total capital resources
17,054
16,542
1. Includes other equity interests of \u20ac 1,239 million (2023: \u20ac1,115 million), for further details see note 36.
The objectives of the Group\u2019s capital management policy are to at all times comply with regulatory capital requirements and to ensure that the
Group has sufficient capital to cover the current and future risk inherent in its business and to support its future development.
35\u00a0 Share capital continued
Earnings per share
The calculation of basic earnings per unit of ordinary shares is based on the profit attributable to ordinary shareholders divided by the weighted
average number of ordinary shares in issue, excluding own shares held. The ordinary shares are included in the weighted average number of
shares on a time apportioned basis.
The diluted earnings per share is based on the profit attributable to ordinary shareholders divided by the weighted average number of ordinary
shares in issue, excluding own shares held, adjusted for the effect of dilutive potential ordinary shares.
There was no difference in the weighted average number of shares used for basic and diluted earnings per share for 2024 and 2023. Warrants
issued to the Minister of Finance were not included in calculating the diluted earnings per share as they were antidilutive.
The following table shows the profit attributable to ordinary shareholders of the parent:
2024
2023
Profit attributable to ordinary shareholders of the parent
\u20ac m
\u20ac m
Profit attributable to equity holders of the parent
2,354
2,061
Distributions on other equity interests (note 36)
(80)
(65)
Profit attributable to ordinary shareholders of the parent
2,274
1,996
The following table shows the basic and diluted earnings per share:
31 December 2024
31 December 2023
Profit
Number of shares1
Earnings per share
Profit
Number of shares1
Earnings per share
\u20ac m
m
\u20ac cent
\u20ac m
m
\u20ac cent
Basic and diluted
2,274
2,459.4
92.5
1,996
2,635.9
75.7
1. Weighted average number of ordinary shares in issue during the year.
36\u00a0 Other equity interests
2024
2023
\u20ac m
\u20ac m
Issued by AIB Group plc
\u20ac 500 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20191
(a)
\u2014
496
\u20ac 625 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20202
(b)
619
619
\u20ac 625 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20242
(c)
620
\u2014
Total other equity interests
1,239
1,115
1. Included in the Group\u2019s capital base in 2023, subsequently redeemed in 2024.
2. Included in the Group\u2019s capital base.
Distributions amounting to \u20ac 80 million (2023: \u20ac 65 million) were paid in 2024 on the Additional Tier 1 Securities issued by AIB Group plc. Other
equity interests are included in the Group\u2019s capital base.
The securities, which do not carry voting rights, rank pari passu with holders of other Tier 1 instruments (excluding the Company\u2019s ordinary
shares). They rank ahead of the holders of ordinary share capital of the Company but junior to the claims of senior creditors and to Tier 2 capital
of\u00a0the Company.
Under the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.
Furthermore, if the CET1 ratio of the Group at any time falls below 7%, subject to certain conditions, the Company shall write down the AT1s by
the write-down amount and irrevocably cancel any accrued and unpaid interest up to (but excluding) the write-down date. To the extent permitted,
in order to comply with regulatory capital and other requirements, the Company may reinstate any previously written down amount.
(a) In 2019, the Company issued \u20ac 500 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on the securities, at a fixed rate of 5.250% per annum, is payable semi-annually in arrears on 9 April and 9 October, commencing on
9\u00a0April 2020. On the first reset date on 9 April 2025, in the event that the securities are not redeemed, interest will be reset to the relevant 5 year
fixed rate plus a margin of 570.2 bps per annum. The interest payment is fully discretionary and non-cumulative and conditional upon the
Company being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory authorities to
cancel an interest payment.
The securities are perpetual securities with no fixed redemption date. The Company may, in its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 9 October 2024 and
ending on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with accrued
but\u00a0unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to
regulatory approval. Following a tender offer to the holders, securities with a nominal value of \u20ac 337 million were repurchased in April 2024 and
the\u00a0remaining \u20ac 163 million were redeemed in October 2024.
36\u00a0 Other equity interests continued
(b) In 2020, the Company issued \u20ac 625 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on the securities, at a fixed rate of 6.250% per annum, is payable semi-annually in arrears on 23 June and 23 December, commencing on
23 December 2020. On the first reset date on 23 December 2025, in the event that the securities are not redeemed, interest will be reset to\u00a0the
relevant 5 year fixed rate plus a margin of 662.9 bps per annum. The interest payment is fully discretionary and non-cumulative and conditional
upon the Company being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory
authorities to cancel an interest payment.
The securities are perpetual securities with no fixed redemption date. The Company may, in its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 23\u00a0June 2025 and ending
on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with accrued but unpaid
interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval.
(c) In 2024, AIB Group plc issued \u20ac 625 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on these securities, at a fixed rate of 7.125% per annum, is payable semi-annually in arrears on 30 April and 30 October, commencing on
30 October 2024. On the first reset date on 30 April 2030, in the event that the securities are not redeemed, interest will be reset to the relevant
five year fixed rate plus a margin of 438.7 bps per annum. The interest payment is fully discretionary and non-cumulative, and conditional upon
AIB\u00a0Group plc being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory authorities
to\u00a0cancel an interest payment.
These securities are perpetual securities with no fixed redemption date. AIB Group plc may, at its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 30 October 2029
and\u00a0ending on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with
accrued but unpaid interest. In addition, the securities are redeemable at the option of AIB Group plc for certain regulatory or tax reasons,
subject\u00a0to regulatory approval.
37\u00a0 Capital reserves, merger reserve and capital redemption reserves
2024
2023
Capital reserves
Capital
contribution
reserves
Other
capital
reserves
Total
Capital
contribution
reserves
Other
capital
reserves
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At beginning and end of year
955
1
178
2
1,133
955
1
178
2
1,133
1. Relates to the acquisition of EBS d.a.c.
2. Other capital reserves represent transfers from retained earnings in accordance with relevant legislation.
For details regarding the capital contribution reserves, refer to accounting policy (w) in note 1.
Merger reserve
2024
2023
\u20ac m
\u20ac m
At beginning and end of year
(3,622)
(3,622)
The following table shows the movement on capital redemption reserves:
Capital redemption reserves
2024
2023
\u20ac m
\u20ac m
At 1 January
73
39
Transfer from ordinary share capital (note 35)
182
34
At 31 December
255
73
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-651": { "value": "
35\u00a0 Share capital
The following table shows the authorised and fully paid issued share capital:
31 December 2024
31 December 2023
Number of
shares
Number of
shares
m
\u20ac m
m
\u20ac m
Authorised
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
4,000.0
2,500
4,000.0
2,500
Issued and fully paid
Ordinary share capital
Ordinary shares of \u20ac 0.625 each
2,328.4
1,455
2,618.7
1,637
All AIB Group plc ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting.
Movement in ordinary shares
The following table shows the movement in the number of ordinary shares:
2024
2023
Number of
shares
Number of
shares
m
m
At 1 January
2,618.7
2,673.4
Repurchase and cancellation of shares1,2
(290.3)
(54.7)
At 31 December
2,328.4
2,618.7
1. In May and September 2024, AIB Group plc completed directed share buybacks from the Minister for Finance. These buybacks resulted in the repurchase of
290,061,315 ordinary shares with a nominal value of \u20ac\u00a00.625 each for a total consideration of \u20ac 1,499 million. The Group incurred costs of \u20ac 2 million in relation to the
directed share buybacks. Following repurchase, these shares\u00a0were cancelled and \u20ac 182 million, representing the aggregate nominal value of the acquired shares,
was transferred from share capital to capital redemption reserves.
2. In October 2024, following the implementation of an Odd-lot Offer, AIB Group plc purchased a total of 253,765 ordinary shares with a nominal value of \u20ac\u00a00.625 each
for a total consideration of \u20ac 1.4 million. Following repurchase, these shares were cancelled and \u20ac 0.2 million, representing the aggregate nominal value of the
acquired shares, was transferred from share capital to capital redemption reserves.
Warrants
In 2017, warrants were issued to the Minister for Finance to subscribe for 271,166,685 ordinary shares of AIB Group plc representing 9.99% of the
issued share capital at the time (31 December 2024: 11.65%). The exercise price for the warrants was originally set at 200% of the Offer Price of
\u20ac 4.40 per ordinary share, the Offer Price being the price in Euro per ordinary share which was payable by investors under the terms of the initial
public offering. In accordance with the terms of the warrants, the exercise price has been adjusted following various share buybacks undertaken
by\u00a0AIB Group plc in recent years (including the directed share buybacks and the Odd-lot Offer completed in 2024) and is now\u00a0\u20ac\u00a07.455 per share.
In accordance with the terms of the Warrant Agreement, no cash consideration was payable by the Minister to AIB Group plc in respect of the
issue of the warrants.
Structure of the Company\u2019s share capital
The following table shows the structure of the Company\u2019s share capital:
31 December 2024
31 December 2023
Authorised
share capital
%
Issued share
capital
%
Authorised
share capital
%
Issued share
capital
%
Class of share
Ordinary share capital
100
100
100
100
Capital resources
The following table shows the Group\u2019s capital resources:
31 December
2024
2023
\u20ac m
\u20ac m
Equity1
15,427
15,069
Dated capital notes (note 33)
1,627
1,473
Total capital resources
17,054
16,542
1. Includes other equity interests of \u20ac 1,239 million (2023: \u20ac1,115 million), for further details see note 36.
The objectives of the Group\u2019s capital management policy are to at all times comply with regulatory capital requirements and to ensure that the
Group has sufficient capital to cover the current and future risk inherent in its business and to support its future development.
35\u00a0 Share capital continued
Earnings per share
The calculation of basic earnings per unit of ordinary shares is based on the profit attributable to ordinary shareholders divided by the weighted
average number of ordinary shares in issue, excluding own shares held. The ordinary shares are included in the weighted average number of
shares on a time apportioned basis.
The diluted earnings per share is based on the profit attributable to ordinary shareholders divided by the weighted average number of ordinary
shares in issue, excluding own shares held, adjusted for the effect of dilutive potential ordinary shares.
There was no difference in the weighted average number of shares used for basic and diluted earnings per share for 2024 and 2023. Warrants
issued to the Minister of Finance were not included in calculating the diluted earnings per share as they were antidilutive.
The following table shows the profit attributable to ordinary shareholders of the parent:
2024
2023
Profit attributable to ordinary shareholders of the parent
\u20ac m
\u20ac m
Profit attributable to equity holders of the parent
2,354
2,061
Distributions on other equity interests (note 36)
(80)
(65)
Profit attributable to ordinary shareholders of the parent
2,274
1,996
The following table shows the basic and diluted earnings per share:
31 December 2024
31 December 2023
Profit
Number of shares1
Earnings per share
Profit
Number of shares1
Earnings per share
\u20ac m
m
\u20ac cent
\u20ac m
m
\u20ac cent
Basic and diluted
2,274
2,459.4
92.5
1,996
2,635.9
75.7
1. Weighted average number of ordinary shares in issue during the year.
36\u00a0 Other equity interests
2024
2023
\u20ac m
\u20ac m
Issued by AIB Group plc
\u20ac 500 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20191
(a)
\u2014
496
\u20ac 625 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20202
(b)
619
619
\u20ac 625 million Additional Tier 1 Perpetual Contingent Temporary Write-Down Securities issued 20242
(c)
620
\u2014
Total other equity interests
1,239
1,115
1. Included in the Group\u2019s capital base in 2023, subsequently redeemed in 2024.
2. Included in the Group\u2019s capital base.
Distributions amounting to \u20ac 80 million (2023: \u20ac 65 million) were paid in 2024 on the Additional Tier 1 Securities issued by AIB Group plc. Other
equity interests are included in the Group\u2019s capital base.
The securities, which do not carry voting rights, rank pari passu with holders of other Tier 1 instruments (excluding the Company\u2019s ordinary
shares). They rank ahead of the holders of ordinary share capital of the Company but junior to the claims of senior creditors and to Tier 2 capital
of\u00a0the Company.
Under the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.
Furthermore, if the CET1 ratio of the Group at any time falls below 7%, subject to certain conditions, the Company shall write down the AT1s by
the write-down amount and irrevocably cancel any accrued and unpaid interest up to (but excluding) the write-down date. To the extent permitted,
in order to comply with regulatory capital and other requirements, the Company may reinstate any previously written down amount.
(a) In 2019, the Company issued \u20ac 500 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on the securities, at a fixed rate of 5.250% per annum, is payable semi-annually in arrears on 9 April and 9 October, commencing on
9\u00a0April 2020. On the first reset date on 9 April 2025, in the event that the securities are not redeemed, interest will be reset to the relevant 5 year
fixed rate plus a margin of 570.2 bps per annum. The interest payment is fully discretionary and non-cumulative and conditional upon the
Company being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory authorities to
cancel an interest payment.
The securities are perpetual securities with no fixed redemption date. The Company may, in its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 9 October 2024 and
ending on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with accrued
but\u00a0unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to
regulatory approval. Following a tender offer to the holders, securities with a nominal value of \u20ac 337 million were repurchased in April 2024 and
the\u00a0remaining \u20ac 163 million were redeemed in October 2024.
36\u00a0 Other equity interests continued
(b) In 2020, the Company issued \u20ac 625 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on the securities, at a fixed rate of 6.250% per annum, is payable semi-annually in arrears on 23 June and 23 December, commencing on
23 December 2020. On the first reset date on 23 December 2025, in the event that the securities are not redeemed, interest will be reset to\u00a0the
relevant 5 year fixed rate plus a margin of 662.9 bps per annum. The interest payment is fully discretionary and non-cumulative and conditional
upon the Company being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory
authorities to cancel an interest payment.
The securities are perpetual securities with no fixed redemption date. The Company may, in its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 23\u00a0June 2025 and ending
on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with accrued but unpaid
interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval.
(c) In 2024, AIB Group plc issued \u20ac 625 million nominal value of Additional Tier 1 Perpetual Contingent Temporary Write-Down
Securities\u00a0(\u2018AT1s\u2019).
Interest on these securities, at a fixed rate of 7.125% per annum, is payable semi-annually in arrears on 30 April and 30 October, commencing on
30 October 2024. On the first reset date on 30 April 2030, in the event that the securities are not redeemed, interest will be reset to the relevant
five year fixed rate plus a margin of 438.7 bps per annum. The interest payment is fully discretionary and non-cumulative, and conditional upon
AIB\u00a0Group plc being solvent at the time of payment, having sufficient distributable reserves and not being required by the regulatory authorities
to\u00a0cancel an interest payment.
These securities are perpetual securities with no fixed redemption date. AIB Group plc may, at its sole and full discretion, subject to regulatory
approval, redeem all (but not some only) of the securities on any day falling in the period commencing on (and including) 30 October 2029
and\u00a0ending on (and including) the first reset date or on any interest payment date thereafter at the prevailing principal amount together with
accrued but unpaid interest. In addition, the securities are redeemable at the option of AIB Group plc for certain regulatory or tax reasons,
subject\u00a0to regulatory approval.
37\u00a0 Capital reserves, merger reserve and capital redemption reserves
2024
2023
Capital reserves
Capital
contribution
reserves
Other
capital
reserves
Total
Capital
contribution
reserves
Other
capital
reserves
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
At beginning and end of year
955
1
178
2
1,133
955
1
178
2
1,133
1. Relates to the acquisition of EBS d.a.c.
2. Other capital reserves represent transfers from retained earnings in accordance with relevant legislation.
For details regarding the capital contribution reserves, refer to accounting policy (w) in note 1.
Merger reserve
2024
2023
\u20ac m
\u20ac m
At beginning and end of year
(3,622)
(3,622)
The following table shows the movement on capital redemption reserves:
Capital redemption reserves
2024
2023
\u20ac m
\u20ac m
At 1 January
73
39
Transfer from ordinary share capital (note 35)
182
34
At 31 December
255
73
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-654": { "value": "
Earnings per share
The calculation of basic earnings per unit of ordinary shares is based on the profit attributable to ordinary shareholders divided by the weighted
average number of ordinary shares in issue, excluding own shares held. The ordinary shares are included in the weighted average number of
shares on a time apportioned basis.
The diluted earnings per share is based on the profit attributable to ordinary shareholders divided by the weighted average number of ordinary
shares in issue, excluding own shares held, adjusted for the effect of dilutive potential ordinary shares.
There was no difference in the weighted average number of shares used for basic and diluted earnings per share for 2024 and 2023. Warrants
issued to the Minister of Finance were not included in calculating the diluted earnings per share as they were antidilutive.
The following table shows the profit attributable to ordinary shareholders of the parent:
2024
2023
Profit attributable to ordinary shareholders of the parent
\u20ac m
\u20ac m
Profit attributable to equity holders of the parent
2,354
2,061
Distributions on other equity interests (note 36)
(80)
(65)
Profit attributable to ordinary shareholders of the parent
2,274
1,996
The following table shows the basic and diluted earnings per share:
31 December 2024
31 December 2023
Profit
Number of shares1
Earnings per share
Profit
Number of shares1
Earnings per share
\u20ac m
m
\u20ac cent
\u20ac m
m
\u20ac cent
Basic and diluted
2,274
2,459.4
92.5
1,996
2,635.9
75.7
1. Weighted average number of ordinary shares in issue during the year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-655": { "value": "
38\u00a0 Offsetting financial assets and financial liabilities
The disclosures set out in the tables below include financial assets and financial liabilities that:
\u2022 Are offset in the Group\u2019s statement of financial position; or
\u2022 Are subject to enforceable master netting arrangements or similar agreements that cover similar financial instruments, irrespective of whether\u00a0
they are offset in the statement of financial position.
The similar agreements include derivative clearing agreements, global master repurchase agreements and global master securities lending\u00a0
agreements. Similar financial instruments include derivatives, sales and repurchase agreements, reverse sale and repurchase agreements,
and\u00a0securities borrowing and lending agreements. Financial instruments such as loans and advances and customer accounts are not included
in\u00a0the tables below unless they are offset in the statement of financial position.
The Group has a number of ISDA Master Agreements (netting agreements) in place which allow it to net the termination values of derivative\u00a0
contracts upon the occurrence of an event of default with respect to its counterparties. The enforcement of netting agreements would
potentially\u00a0reduce the statement of financial position carrying amount of derivative assets and liabilities by \u20ac 1,385 million at 31 December 2024
(2023: \u20ac 1,556 million).\u00a0 Additionally, the Group has agreements in place which may allow it to net the termination values of cross currency swaps
upon the occurrence of an event of default.
The Group\u2019s sale and repurchase and reverse sale-and-repurchase transactions and securities borrowing and lending are covered by netting\u00a0
agreements with terms similar to those of ISDA Master Agreements. The ISDA Master Agreements and similar master netting arrangements do not
meet the criteria for offsetting in the statement of financial position where a right of set-off of recognised amounts becomes enforceable only
following an event of default, insolvency or bankruptcy of the\u00a0 Group or the counterparties. Offsetting in the statement of financial position is
applied where the Group has a legally enforceable right to set-off the recognised amounts and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
The Group provides and accepts collateral in the form of cash and marketable securities in respect of the following transactions:
\u2022 Derivatives;
\u2022 Sale and repurchase agreements;
\u2022 Reverse sale and repurchase agreements; and
\u2022 Securities lending and borrowing.
Collateral is subject to the standard industry terms of Credit Support Annexes (\u2018CSAs\u2019), which enable the Group to pledge or sell securities
received during the term of the transaction. The collateral must be returned on the maturity of the transaction. The terms also give each
counterparty the right to terminate the related transactions where the counterparty fails to post collateral. The CSAs in place provide collateral
for\u00a0derivative contracts. At 31 December 2024, \u20ac 698 million (2023: \u20ac 713 million) of CSAs are included within financial assets and \u20ac 814 million
(2023: \u20ac 839 million) of CSAs are included within financial liabilities.
The following table shows financial assets and financial liabilities subject to offsetting, enforceable master netting arrangements and similar
agreements and those amounts not subject to offsetting at 31 December 2024 and 2023. The effects of over-collateralisation have not been taken
into account in the table below.
Amounts subject to enforceable netting arrangements
2024
Gross
amounts of
recognised
financial
assets
Gross
amounts of
recognised
financial
liabilities
offset in the
statement
of financial
position
Net
amounts of
financial
assets
presented
in the
statement
of financial
position
Related amounts not
offset in the statement
of financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
assets
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial assets
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
2,134
\u2014
2,134
(1,385)
(251)
498
10
2,144
Securities financing
Reverse repurchase agreements
19
5,215
(1,660)
3,555
(3,538)
(17)
\u2014
\u2014
3,555
Securities borrowings
19
3,088
\u2014
3,088
(3,088)
\u2014
\u2014
\u2014
3,088
Total
10,437
(1,660)
8,777
(8,011)
(268)
498
10
8,787
Amounts subject to enforceable netting arrangements
2024
Gross
amounts of
recognised
financial
liabilities
Gross
amounts of
recognised
financial
assets
offset in the
statement
of financial
position
Net
amounts of
financial
liabilities
presented
in the
statement
of financial
position
Related amounts not
offset in the statement
of financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
liabilities
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial liabilities
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
1,779
\u2014
1,779
(1,385)
(135)
259
28
1,807
Securities financing
Securities sold under
agreements to repurchase
19
1,856
(1,660)
196
(187)
(9)
\u2014
\u2014
196
Total
3,635
(1,660)
1,975
(1,572)
(144)
259
28
2,003
38\u00a0 Offsetting financial assets and financial liabilities continued
Amounts subject to enforceable netting arrangements
2023
Gross
amounts of
recognised
financial
assets
Gross
amounts of
recognised
financial
liabilities
offset in the
statement
of financial
position
Net
amounts of
financial
assets
presented
in the
statement of
financial
position
Related amounts not
offset\u00a0in the statement of
financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
assets
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial assets
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
2,356
\u2014
2,356
(1,556)
(218)
582
21
2,377
Securities financing
Reverse repurchase
agreements
19
7,530
(3,731)
3,799
(3,734)
(65)
\u2014
\u2014
3,799
Securities borrowings
19
2,667
\u2014
2,667
(2,667)
\u2014
\u2014
\u2014
2,667
Total
12,553
(3,731)
8,822
(7,957)
(283)
582
21
8,843
Amounts subject to enforceable netting arrangements
2023
Gross
amounts of
recognised
financial
liabilities
Gross
amounts of
recognised
financial
assets
offset in the
statement
of financial
position
Net
amounts of
financial
liabilities
presented
in the
statement of
financial
position
Related amounts not
offset\u00a0in the statement of
financial position
Amounts not
subject to
enforceable
netting
arrangements
Total
amount of
financial
liabilities
presented
in the
statement
of financial
position
Financial
instruments
Cash
collateral
Net
amount
Financial liabilities
Note
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Derivative financial instruments
16
1,881
\u2014
1,881
(1,556)
(92)
233
21
1,902
Securities financing
Securities sold under
agreements to repurchase
19
4,306
(3,731)
575
(534)
(41)
\u2014
\u2014
575
Total
6,187
(3,731)
2,456
(2,090)
(133)
233
21
2,477
", "dimensions": { "concept": "ifrs-full:DisclosureOfOffsettingOfFinancialAssetsAndFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-657": { "value": "
39\u00a0 Contingent liabilities and commitments
In the normal course of business, the Group is a party to financial instruments with off-balance sheet risk to meet the financing needs of customers. These
instruments involve, to varying degrees, elements of credit risk which are not reflected in the consolidated statement of financial position. Credit risk is
defined as the possibility of sustaining a loss because the other party to a financial instrument fails to perform in accordance with the terms of the contract.
The Group\u2019s maximum exposure to credit loss under contingent liabilities and commitments to extend credit, in the event of non-performance by\u00a0the
other party where all counterclaims, collateral or security prove valueless, is represented by the contractual amounts of those instruments. The Group
uses the same credit control and risk management policies in undertaking off-balance sheet commitments as it does for \u2018on-balance sheet lending\u2019.
The following table gives the nominal or contract amounts of contingent liabilities and commitments:
Contract amount
2024
2023
\u20ac m
\u20ac m
Contingent liabilities1 \u2013 credit related
Guarantees and assets pledged as collateral security:
Guarantees and irrevocable letters of credit
952
829
Other contingent liabilities
24
28
976
857
Commitments2
Documentary credits and short term trade-related transactions
276
208
Undrawn formal standby facilities, credit lines and other commitments to lend:
Less than 1 year
10,443
9,827
1 year and over
6,104
6,101
16,823
16,136
Total contingent liabilities and commitments
17,799
16,993
1. Contingent liabilities are off-balance sheet products and include guarantees, irrevocable letters of credit and other contingent liability products.
2. A commitment is an off-balance sheet product where there is an agreement to provide an undrawn credit facility.
For details of the geographic concentration of contingent liabilities and commitments and internal credit ratings, see pages 204 and 215 in the Risk
management section of this report. Provisions for ECLs on loan commitments and financial guarantee contracts are set out in note 34.
Legal proceedings
The\u2008Group, in the course of its business, is frequently involved in litigation cases. However, it is not, nor has been involved in, nor are there, so far
as the Group is aware, (other than as set out in the following paragraphs), pending or threatened by or against the Group any legal or arbitration
proceedings, including governmental proceedings, which may have, or have had during the previous twelve months, a material effect on the
financial position, profitability or cash flows of the\u2008Group.
Specifically, litigation has been served on the Group by customers that are pursuing claims in relation to tracker mortgages. Customers have also
lodged complaints to the Financial Services and Pensions Ombudsman (\u2018FSPO\u2019) in\u00a0relation to tracker mortgages issues.
Further claims may also be served in the future in relation to tracker mortgages. The Group will also receive further rulings by the FSPO in relation
to complaints concerning tracker mortgages.
Based on the facts currently known and the current stages that the litigation and the FSPO\u2019s complaints process is at, it is not practicable at this
time to predict the final outcome of this litigation/FSPO complaints, nor the timing and possible impact on the Group.
TARGET-Ireland \u2013 Gross Settlement System
TARGET Services have been developed to ensure the free flow of cash, securities and collateral across Europe. The TARGET-Ireland system is a
real time gross settlement system for large volume interbank payments in Euro. On 16 March 2023, as part of its participation in TARGET-Ireland,
Allied Irish Banks, p.l.c. (\u2018AIB\u2019) entered a deed of charge in favour of the Central Bank of Ireland (\u2018CBI\u2019). This charge gives the CBI a first floating
charge security over all present and future credit balances in AIB\u2019s TARGET-Ireland Accounts to secure all liabilities of AIB to the CBI in connection
with AIB\u2019s participation in TARGET-Ireland.
In addition, the CBI has provided AIB with a credit line facility for intra-day credit in TARGET2-Ireland (now TARGET-Ireland) in relation to
Eurosystem Operations. In connection with this, AIB on 7 April 2014, provided the CBI with a fixed charge security over AIB\u2019s eligible assets (as
identified by the CBI) which are held in a designated collateral account and also a floating charge security over other eligible assets of AIB.
AIB cannot, without the prior written consent of the CBI:
\u2022 Create or attempt to create or permit to arise or subsist any encumbrance on or over this charged property or any part of it; or
\u2022 Otherwise than in the ordinary course of business, sell, transfer, lend or otherwise dispose of or deal in the property or assets subject to the\u00a0
charges or any part of it.\u00a0
The financial assets pledged as collateral, in relation to the first fixed charge, are included in the disclosure in note 28 for financial assets pledged.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-656": { "value": "
39\u00a0 Contingent liabilities and commitments
In the normal course of business, the Group is a party to financial instruments with off-balance sheet risk to meet the financing needs of customers. These
instruments involve, to varying degrees, elements of credit risk which are not reflected in the consolidated statement of financial position. Credit risk is
defined as the possibility of sustaining a loss because the other party to a financial instrument fails to perform in accordance with the terms of the contract.
The Group\u2019s maximum exposure to credit loss under contingent liabilities and commitments to extend credit, in the event of non-performance by\u00a0the
other party where all counterclaims, collateral or security prove valueless, is represented by the contractual amounts of those instruments. The Group
uses the same credit control and risk management policies in undertaking off-balance sheet commitments as it does for \u2018on-balance sheet lending\u2019.
The following table gives the nominal or contract amounts of contingent liabilities and commitments:
Contract amount
2024
2023
\u20ac m
\u20ac m
Contingent liabilities1 \u2013 credit related
Guarantees and assets pledged as collateral security:
Guarantees and irrevocable letters of credit
952
829
Other contingent liabilities
24
28
976
857
Commitments2
Documentary credits and short term trade-related transactions
276
208
Undrawn formal standby facilities, credit lines and other commitments to lend:
Less than 1 year
10,443
9,827
1 year and over
6,104
6,101
16,823
16,136
Total contingent liabilities and commitments
17,799
16,993
1. Contingent liabilities are off-balance sheet products and include guarantees, irrevocable letters of credit and other contingent liability products.
2. A commitment is an off-balance sheet product where there is an agreement to provide an undrawn credit facility.
For details of the geographic concentration of contingent liabilities and commitments and internal credit ratings, see pages 204 and 215 in the Risk
management section of this report. Provisions for ECLs on loan commitments and financial guarantee contracts are set out in note 34.
Legal proceedings
The\u2008Group, in the course of its business, is frequently involved in litigation cases. However, it is not, nor has been involved in, nor are there, so far
as the Group is aware, (other than as set out in the following paragraphs), pending or threatened by or against the Group any legal or arbitration
proceedings, including governmental proceedings, which may have, or have had during the previous twelve months, a material effect on the
financial position, profitability or cash flows of the\u2008Group.
Specifically, litigation has been served on the Group by customers that are pursuing claims in relation to tracker mortgages. Customers have also
lodged complaints to the Financial Services and Pensions Ombudsman (\u2018FSPO\u2019) in\u00a0relation to tracker mortgages issues.
Further claims may also be served in the future in relation to tracker mortgages. The Group will also receive further rulings by the FSPO in relation
to complaints concerning tracker mortgages.
Based on the facts currently known and the current stages that the litigation and the FSPO\u2019s complaints process is at, it is not practicable at this
time to predict the final outcome of this litigation/FSPO complaints, nor the timing and possible impact on the Group.
TARGET-Ireland \u2013 Gross Settlement System
TARGET Services have been developed to ensure the free flow of cash, securities and collateral across Europe. The TARGET-Ireland system is a
real time gross settlement system for large volume interbank payments in Euro. On 16 March 2023, as part of its participation in TARGET-Ireland,
Allied Irish Banks, p.l.c. (\u2018AIB\u2019) entered a deed of charge in favour of the Central Bank of Ireland (\u2018CBI\u2019). This charge gives the CBI a first floating
charge security over all present and future credit balances in AIB\u2019s TARGET-Ireland Accounts to secure all liabilities of AIB to the CBI in connection
with AIB\u2019s participation in TARGET-Ireland.
In addition, the CBI has provided AIB with a credit line facility for intra-day credit in TARGET2-Ireland (now TARGET-Ireland) in relation to
Eurosystem Operations. In connection with this, AIB on 7 April 2014, provided the CBI with a fixed charge security over AIB\u2019s eligible assets (as
identified by the CBI) which are held in a designated collateral account and also a floating charge security over other eligible assets of AIB.
AIB cannot, without the prior written consent of the CBI:
\u2022 Create or attempt to create or permit to arise or subsist any encumbrance on or over this charged property or any part of it; or
\u2022 Otherwise than in the ordinary course of business, sell, transfer, lend or otherwise dispose of or deal in the property or assets subject to the\u00a0
charges or any part of it.\u00a0
The financial assets pledged as collateral, in relation to the first fixed charge, are included in the disclosure in note 28 for financial assets pledged.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-658": { "value": "
40\u00a0 Subsidiaries and structured entities
The material Group subsidiary companies a t 31 December 2024 and 2023 are:
Name of company
Principal activity
Place of
incorporation
Registered
Office
Allied Irish Banks, p.l.c.
A direct subsidiary of AIB Group plc and
the\u00a0principal operating company of the Group
and holds the majority of the subsidiaries
within\u00a0the Group. Its activities include banking
and financial services \u2013 a licensed bank
Ireland
10 Molesworth Street,
Dublin 2,
Ireland.
AIB Mortgage Bank Unlimited Company
Issue of Irish residential mortgages and
mortgage covered securities
\u2013 a licensed bank
Ireland
10 Molesworth Street,
Dublin 2,
Ireland.
EBS d.a.c.
Mortgages and savings
\u2013 a licensed bank
Ireland
10 Molesworth Street,
Dublin 2,
Ireland.
AIB Group (UK) p.l.c. trading as Allied Irish Bank (GB)
in Great Britain and AIB (NI) in Northern Ireland
Banking and financial services
\u2013 a licensed bank
Northern Ireland
92 Ann Street,
Belfast BT1 3HH.
The proportion of ownership interest and voting power held by AIB Group plc in Allied Irish Banks, p.l.c. is 100% of the ordinary share capital.
All\u00a0subsidiaries of Allied Irish Banks, p.l.c., being the immediate subsidiary of AIB Group plc, are wholly owned apart from Augmentum Limited
(\u2018Augmentum\u2019), in which there are non-controlling interests. Practically all subsidiaries in the Group are involved in the provision of financial
services or ancillary services.
Significant restrictions
Each of the subsidiaries listed above which is a licensed bank is required by its respective financial regulator to maintain capital ratios above
a\u00a0certain minimum level. These minimum ratios restrict the payment of dividend by the subsidiary and, where the ratios fall below the minimum
requirement, will require the parent company to inject capital to make up the shortfall.
Consolidated structured entities
The Group considers itself a sponsor of a structured entity when it facilitates the establishment of the structured entity.
(i) Consolidated structured entities used for funding activities
The Group is a sponsor for a number of structured entities which were established in order to generate funding for the Group\u2019s lending activities.
The following structured entities, which are used for this activity, are consolidated by the Group:
Burlington Mortgages No. 1 DAC
In 2020, the Group securitised \u20ac 4 billion of its residential mortgage portfolio held in two of its subsidiaries, EBS d.a.c. and Haven Mortgages
Limited. These mortgages were transferred to a securitisation vehicle, Burlington Mortgages No. 1 DAC (\u2018Burlington 1\u2019). In order to fund the
acquired mortgages, Burlington issued eleven classes of notes to EBS d.a.c. and Haven in the same proportion as the mortgages securitised.
The\u00a0transferred mortgages have not been derecognised as the Group retains substantially all the risks and rewards of ownership and continue
to\u00a0be reported in the Group\u2019s financial statements. Burlington 1 is consolidated into the Group\u2019s financial statements with all the notes being
eliminated on consolidation. At 31 December 2024, the carrying amount of the transferred financial assets which the Group continues to recognise
is \u20ac 2.2 billion (2023: \u20ac 2.4 billion) (fair value \u20ac 2.2 billion (2023: \u20ac 2.4 billion)) and the carrying amount of the associated liabilities is\u00a0Nil\u00a0(2023: Nil).
Burlington Mortgages No. 2 DAC
In 2023, the Group securitised c. \u20ac 5 billion of its residential mortgage portfolio held in two of its subsidiaries, EBS d.a.c. and Haven Mortgages
Limited. These mortgages were transferred to a securitisation vehicle, Burlington Mortgages No. 2 DAC (\u2018Burlington 2\u2019). In order to fund the
acquired mortgages, Burlington 2 issued seven classes of notes to EBS d.a.c. and Haven in the same proportion as the securitised mortgages.
The transferred mortgages have not been derecognised as the Group retains substantially all the risks and rewards of ownership and continue
to\u00a0be reported in the Group\u2019s financial statements. Burlington 2 is consolidated into the Group\u2019s financial statements with all the notes being
eliminated on consolidation. At 31 December 2024, the carrying amount of the transferred financial assets which the Group continues to recognise
is \u20ac 5 billion (fair value \u20ac 4.9 billion) (2023: \u20ac 5 billion (fair value \u20ac 4.9 billion)) and the carrying amount of the associated liabilities is\u00a0Nil\u00a0(2023: Nil).
40\u00a0 Subsidiaries and structured entities continued
(ii) Consolidated structured entity used for funding of the deficit in the UK pension scheme
The Group is a sponsor for AIB PFP Scottish Limited Partnership ('SLP') which was established to fund future deficit payments of the UK scheme.
In December 2013, the Group agreed with the Trustee of the AIB UK Defined Benefit Pension Scheme ('the UK scheme') a restructure of the
funding of the deficit in the UK scheme. The Group established a pension funding partnership, AIB PFP Scottish Limited Partnership ('SLP') under
which a portfolio of loans were transferred to the SLP from another Group entity, AIB UK Loan Management Limited ('UKLM') for the purpose of
ring-fencing the repayments on these loans to fund future deficit payments of the UK scheme.
Assets ring\u2013fenced for this purpose entitled the UK Scheme to expected annual payments in the range of \u00a3 15 million to \u00a3 35 million per annum
from 2016 until 2032, with a potential termination payment in 2032 of up to \u00a3 60 million. This funding plan was replaced in December 2019, as part
of the de-risking of the UK scheme (note 27). Under the 2019 funding arrangement, the Group expects to make payments of \u00a3 9.5 million in 2025,
subject to change prior to finalisation. The 2019 funding arrangement also limited the potential liability of the SLP to the UK scheme and, when
the\u00a0cash held by the SLP exceeded the maximum potential liability limit in 2023, the ring-fenced loans were removed from the arrangement on
30\u00a0June 2023. UKLM has the right to cash flows on the loans from that date.
The general partner in the partnership, AIB PFP (General Partner) Limited which is an indirect subsidiary of Allied Irish Banks, p.l.c. has controlling
power over the partnership. In addition, the pension scheme has a priority right to cash flows from the partnership, up to the SLP\u2019s maximum
potential liability limit, and any risks and rewards thereafter are expected to be borne by the Group through UKLM\u2019s junior partnership interest.
(iii) Consolidated structured entity used for a credit risk transfer transaction
The Group has entered into a transaction to transfer a portion of credit risk on a reference portfolio of financial assets. The funded protection in
respect of this transactions is held with Setanta Finance 2024 Designated Activity Company (\u2018Setanta\u2019). No assets or liabilities were transferred to
Setanta under the terms of the transaction. The transaction has cash collateralised on the exposure through the issue of credit linked notes to third
party investors. Further details on this transaction are set out in note 30. The protection provided by Setanta matures in 2032 and there are no
contractual arrangements that require the Group to provide financial support.
There are no contractual arrangements that could require AIB Group plc or its subsidiaries to provide financial support to the consolidated
structured entities listed above. During the year, neither AIB Group plc nor any of its subsidiaries provided financial support to a consolidated
structured entity and there is no current intention to provide financial support.
Unconsolidated structured entities
The Group acts as a fund or investment manager for a number of unconsolidated structured entities for which it receives investment or fund
management fees. The Group acts as sponsor of these entities. The Group has no units within these funds. Therefore the carrying amount of
assets and liabilities in relation to these entities in the Group\u2019s statement of financial position is Nil (2023: Nil).
The Group\u2019s maximum exposure to loss is equal to the value of outstanding fees owed from these entities of Nil at 31 December 2024
(31\u00a0December 2023: Nil). These entities are financed by investors in the entities. During the year the Group has not provided any non-contractual
financial or other support to these entities and has no current intention of providing any financial or other support.
Non-controlling interests in subsidiary undertaking
On 31 October 2019, Augmentum Limited of which 75% is owned by the Group and 25% by a non-controlling interest, First Data Global Services
Limited (part of First Data Corporation which is owned by Fiserv Inc.), acquired 97.93% of the equity share capital and voting rights of Semeral
Limited (\u2018Semeral\u2019), the holding company for Payzone Ireland Limited (\u2018Payzone\u2019). Semeral/Payzone place of business:\u00a04 Heather Road,
Sandyford Industrial Estate, Dublin 18", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-659": { "value": "
Non-controlling interests in subsidiary undertaking
On 31 October 2019, Augmentum Limited of which 75% is owned by the Group and 25% by a non-controlling interest, First Data Global Services
Limited (part of First Data Corporation which is owned by Fiserv Inc.), acquired 97.93% of the equity share capital and voting rights of Semeral
Limited (\u2018Semeral\u2019), the holding company for Payzone Ireland Limited (\u2018Payzone\u2019). Semeral/Payzone place of business:\u00a04 Heather Road,
Sandyford Industrial Estate, Dublin 18.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-660": { "value": "
41\u00a0 Off-balance sheet arrangements and transferred financial assets
Under IFRS, transactions and events are accounted for and presented in accordance with their substance and economic reality and not merely
their legal form. As a result, the substance of transactions with structured entities forms the basis for their treatment in the Group\u2019s financial
statements. A structured entity is consolidated in the financial statements when the substance of the relationship between the Group and the
structured entity indicates that the structured entity is controlled by the entity and meets the criteria set out in IFRS 10. The principal forms of
structured entity utilised by the Group are securitisations.
Securitisations
The Group utilises securitisations primarily to support the following business objectives:
\u2022 As an investor, the Group has primarily been an investor in securitisations issued by other credit institutions as part of the management of its
interest rate and liquidity risks through the Treasury function;
\u2022 As an investor, securitisations have been utilised by the Group to invest in transactions that offered an appropriate risk-adjusted return opportunity;
and
\u2022 As an originator of securitisations to support the funding activities of the Group.
The Group controls certain structured entities which were set up to support its funding activities and two structured entities set up in relation to the
funding of the Group Pension Schemes. Details of these structured entities are set out in note 40 \u2018Subsidiaries and Structured Entities\u2019.
Securities borrowing and reverse repurchase agreements
Securities borrowed are not recognised in the financial statements, unless these are sold to third parties, at which point the obligation to repurchase
the securities is recorded as a trading liability at fair value and any subsequent gain or loss is included in trading income.
Transfer of financial assets
The Group enters into transactions in the normal course of business in which it transfers previously recognised financial assets. Transferred
financial assets may, in accordance with IFRS 9:
(i) Continue to be recognised in their entirety; or
(ii) Be derecognised in their entirety but the Group retains some continuing involvement.
The most common transactions where the transferred assets are not derecognised in their entirety are securities sold under an agreement to
repurchase and the issuance of covered bonds.
(i) Transferred financial assets not derecognised in their entirety
Securities sold under agreements to repurchase and securities lending
Sale and repurchase agreements are transactions in which the Group sells a financial asset to another party, with an obligation to repurchase it at
a fixed price on a certain later date. The Group continues to recognise the financial assets in full in the statement of financial position as it retains
substantially all the risks and rewards of ownership. The Group\u2019s sale and repurchase agreements are with banks and customers. The obligation
to pay the repurchase price is recognised within \u2018Securities financing\u2019 (note 19). As the Group sells the contractual rights to the cash flows of the
financial assets, it does not have the ability to use or pledge the transferred assets during the term of the sale and repurchase agreement. The
Group remains exposed to credit risk and interest rate risk on the financial assets sold. The obligation arising as a result of sale and repurchase
agreements together with the carrying value of the financial assets pledged are set out in the table below.
The Group enters into securities lending in the form of collateral swap agreements with other parties. The Group continues to recognise the
financial assets in full in the statement of financial position as it retains substantially all the risks and rewards of ownership. As a result of these
transactions, the Group is unable to use, sell or pledge the transferred assets for the duration of the transaction. A fee is generated for the Group
under this transaction.
Issuance of covered bonds
Covered bonds, which the Group issues, are debt securities backed by cash flows from mortgages for the purpose of financing loans secured on
residential property through its wholly owned subsidiary, AIB Mortgage Bank Unlimited Company. The Group retains all the risks and rewards of
these mortgage loans, including credit risk and interest rate risk, and therefore, the loans continue to be recognised on the Group\u2019s statement
of\u00a0financial position with the related covered bonds held by external investors included within \u2018Debt securities in issue\u2019 (note 30). As the Group
segregates the assets which back these debt securities into 'cover asset pools' it does not have the ability to otherwise use such segregated
financial assets during the term of these debt securities. However, of the total debt securities of this type issued amounting to \u20ac 10.6 billion
(2023: \u20ac 9.9 billion), AIB Group companies hold \u20ac 10.58 billion (2023: \u20ac 9.87 billion) which are eliminated on consolidation.
41\u00a0 Off-balance sheet arrangements and transferred financial assets continued
The following table summarises as at 31 December 2024 and 2023, the carrying value and fair value of financial assets which did not qualify for
derecognition together with their associated financial liabilities.
2024
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair
value of
transferred
assets
Fair
value of
associated
liabilities
Net fair
value
position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Securities sold under agreements to repurchase/similar products
2,822
1,2
196
1
2,821
196
2,625
Covered bond programmes
Residential mortgage backed
36
3
27
4
35
28
7
2023
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair
value of
transferred
assets
Fair
value of
associated
liabilities
Net fair
value
position
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Securities sold under agreements to repurchase/similar products
4,955
1,2
575
1
4,973
575
4,398
Covered bond programmes
Residential mortgage backed
38
3
27
4
37
28
9
1. See note 19.
2. Includes \u20ac 2,630 million of assets pledged in relation to securities lending arrangements (2023: \u20ac 4,360 million).
3. The asset pools of \u20ac 15 billion (2023: \u20ac 15 billion) in the covered bond programme have been apportioned on a pro-rata basis in relation to the value of bonds held
by\u00a0external investors and those held by the Group companies. The \u20ac 36 million (2023: \u20ac 38 million) above refers to those assets apportioned to external investors.
4. Included in \u2018Bonds and other medium term notes\u2019 issued by subsidiaries (note 30).
(ii) Transferred financial assets derecognised in their entirety but the Group retains some continuing involvement
The Group has a continuing involvement in transferred financial assets where it retains any of the risks and rewards of ownership of the
transferred financial assets. Set out below are transactions in which the Group has a continuing involvement in assets transferred.
Pension scheme
On 31 July 2012, the Group entered into a Contribution Deed with the Trustee of the AIB Group Irish Pension Scheme (\u2018the Irish Scheme\u2019),
whereby it agreed to make contributions to the scheme to enable the Trustee ensure that the regulatory Minimum Funding Standard position
of\u00a0non-pensioner members of the pension scheme was not affected by the agreed early retirement scheme. These contributions amounting to\u00a0
\u20ac 594 million were settled through the transfer to the Irish Scheme of interests in a structured entity owning loans and advances previously
transferred at fair value from the Group. The loans and advances were derecognised in the Group\u2019s financial statements as all of the risks and
rewards of ownership had transferred.
A subsidiary company of the Group was appointed as a service provider for the loans and advances transferred. Under the servicing agreement,
the Group subsidiary company collects the cash flows on the transferred loans and advances on behalf of the pension scheme in return for a fee.
The fee is based on an annual rate of 0.125% of the principal balance outstanding of all transferred loans and advances on the last day of each
calendar month. The Group has not recognised a servicing asset/liability in relation to this servicing arrangement as the fee is considered to be at
market rate. Under the servicing agreement, the Irish Scheme has the right to replace the Group subsidiary company as the service provider with
an external third party. In 2024, the Group recognised \u20ac 0.3 million (cumulative \u20ac 9.9 million) (2023: \u20ac 0.4 million (cumulative \u20ac 9.6 million)) in the
income statement for the servicing of the loans and advances transferred.
NAMA
During 2010 and 2011, the Group transferred financial assets with a net carrying value of \u20ac 15,428 million to NAMA. All assets transferred
were\u00a0derecognised in their entirety. As part of this transaction, the Group has provided NAMA with a series of indemnities relating to the
transferred\u00a0assets.
The Group was appointed by NAMA as a service provider for the loans and advances transferred, for which it receives a fee. The fee is based on
the lower of actual costs incurred or 0.1% of the value of the financial assets transferred. The Group has not recognised a servicing asset/liability
in relation to this servicing arrangement as the fee is considered to be at market rate. In 2024, the Group recognised \u20ac 1 million (cumulative \u20ac 102
million) (2023: \u20ac 1 million (cumulative \u20ac\u00a0101\u00a0million)) in the income statement for the servicing of financial assets transferred to NAMA.
42\u00a0 Classification and measurement of financial assets and financial liabilities
Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The accounting policy for
financial assets in note 1 (j) and financial liabilities in note 1 (k), describes how the classes of financial instruments are measured, and how income
and expenses, including fair value gains and losses, are recognised.
The following table analyses the carrying amounts of the financial assets and financial liabilities by measurement category and by statement of
financial position heading at 31 December 2024 and 2023.
2024
At fair value through
profit or loss
At fair value through other
comprehensive income
At
amortised
cost
Total
Mandatorily
Debt
investments
Hedging
derivatives
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets
Cash and balances at central banks
\u2014
\u2014
\u2014
37,315
1
37,315
Trading portfolio financial assets
136
\u2014
\u2014
\u2014
136
Derivative financial instruments
1,480
2
\u2014
664
\u2014
2,144
Loans and advances to banks
\u2014
\u2014
\u2014
1,321
1,321
Loans and advances to customers
64
\u2014
\u2014
69,825
69,889
Securities financing
\u2014
\u2014
\u2014
6,643
6,643
Investment securities
297
13,568
\u2014
4,803
18,668
Other financial assets
\u2014
\u2014
\u2014
894
894
Total
1,977
13,568
664
120,801
137,010
Financial liabilities
Deposits by central banks and banks
\u2014
\u2014
\u2014
836
836
Customer accounts
\u2014
\u2014
\u2014
109,883
109,883
Securities financing
\u2014
\u2014
\u2014
196
196
Trading portfolio financial liabilities
262
\u2014
\u2014
\u2014
262
Derivative financial instruments
824
3
\u2014
983
\u2014
1,807
Debt securities in issue
\u2014
\u2014
\u2014
8,832
8,832
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
1,627
1,627
Other financial liabilities
\u2014
\u2014
\u2014
1,792
1,792
Total
1,086
\u2014
983
123,166
125,235
1. Includes cash on hand \u20ac 664 million.
2. Held for trading \u20ac 425 million and fair value hedges \u20ac 1,055 million.
3. Held for trading \u20ac 461 million and fair value hedges \u20ac 363 million.
42\u00a0 Classification and measurement of financial assets and financial liabilities continued
2023
At fair value through
profit or loss
At fair value through other
comprehensive income
At
amortised
cost
Total
Mandatorily
Debt
investments
Hedging
derivatives
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets
Cash and balances at central banks
\u2014
\u2014
\u2014
38,018
1
38,018
Trading portfolio financial assets
93
\u2014
\u2014
\u2014
93
Derivative financial instruments
1,694
2
\u2014
683
\u2014
2,377
Loans and advances to banks
\u2014
\u2014
\u2014
1,329
1,329
Loans and advances to customers
42
\u2014
\u2014
65,449
65,491
Securities financing
\u2014
\u2014
\u2014
6,466
6,466
Investment securities
355
12,488
\u2014
4,510
17,353
Other financial assets
\u2014
\u2014
\u2014
688
688
Total
2,184
12,488
683
116,460
131,815
Financial liabilities
Deposits by central banks and banks
\u2014
\u2014
\u2014
1,780
1,780
Customer accounts
\u2014
\u2014
\u2014
104,782
104,782
Securities financing
\u2014
\u2014
\u2014
575
575
Trading portfolio financial liabilities
139
\u2014
\u2014
\u2014
139
Derivative financial instruments
790
3
\u2014
1,112
\u2014
1,902
Debt securities in issue
\u2014
\u2014
\u2014
8,423
8,423
Subordinated liabilities and other capital instruments
\u2014
\u2014
\u2014
1,473
1,473
Other financial liabilities
\u2014
\u2014
\u2014
1,571
1,571
Total
929
\u2014
1,112
118,604
120,645
1. Includes cash on hand \u20ac 598 million.
2. Held for trading \u20ac 457 million and fair value hedges \u20ac 1,237 million.
3. Held for trading \u20ac 448 million and fair value hedges \u20ac 342 million.
43\u00a0 Fair value of financial instruments
The term \u2018financial instruments\u2019 includes both financial assets and financial liabilities. The fair value of a financial instrument is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the
principal market, or in its absence, the most advantageous market to which the Group has access at that date. The Group\u2019s accounting policy for
the \u2018determination of fair value of financial instruments\u2019 is set out in note 1 accounting policy (m).
The valuation of financial instruments, including loans and advances, involves the application of judgement and estimation. Market and credit risks
are key assumptions in the estimation of the fair value of loans and advances. The Group has estimated the fair value of its loans to customers
taking into account market risk and the changes in credit quality of its borrowers.
Fair values are based on observable market prices where available, and on valuation models or techniques where the lack of market liquidity
means that observable prices are unavailable. The fair values of financial instruments are classified according to the following fair value hierarchy
that reflects the observability of significant market inputs:
Level 1 \u2013 financial assets and liabilities measured using quoted market prices from an active market (unadjusted);
Level 2 \u2013 financial assets and liabilities measured using valuation techniques which use quoted market prices from an active market or measured
using quoted market prices unadjusted from an inactive market; and
Level 3 \u2013 financial assets and liabilities measured using valuation techniques which use unobservable market inputs.
All valuations are carried out within the Finance function and valuation methodologies are validated by the independent Risk function within the
Group. Readers of these financial statements are advised to use caution when using the data in the following tables to evaluate the Group\u2019s
financial position or to make comparisons with other institutions. Fair value information is not provided for items that do not meet the definition
of\u00a0a\u00a0financial instrument.
Methodologies used for the calculation of fair value
The methods used for calculation of fair value in 2024 are as follows:
Financial instruments measured at fair value in the financial statements
(i) Trading portfolio financial instruments
The fair value of trading debt securities, together with quoted equity shares is based on quoted prices or bid/offer quotations sourced from external
securities dealers, where these are available on an active market. Where securities and equities are traded on an exchange, the fair value is based
on prices from the exchange.
(ii) Derivative financial instruments
Where derivatives are traded on an exchange, the fair value is based on prices from the exchange. The fair value of over-the-counter derivative
financial instruments is estimated based on standard market discounting and valuation methodologies which use reliable observable inputs
including yield curves and market rates. These methodologies are implemented by the Finance function and validated by the Risk function. Where
there is uncertainty around the inputs to a derivative\u2019s valuation model, the fair value is estimated using inputs which provide the Group\u2019s view of
the most likely outcome in a disposal transaction between willing counterparties in a functioning market. Where an unobservable input is material
to the outcome of the valuation, a range of potential outcomes from favourable to unfavourable is estimated.
Counterparty valuation adjustment ('CVA') and Funding valuation adjustment ('FVA') are applied to all uncollateralised over-the-counter derivatives.
The combination of CVA and FVA is referred to as XVA.
CVA is calculated as: Expected positive exposure ('EPE') multiplied by probability of default ('PD') multiplied by loss given default ('LGD').
EPE\u00a0profiles are generated at a counterparty netting set through simulation. PDs are derived from market based credit default swaps ('CDS')
information. As most counterparties do not have a quoted CDS, PDs are derived by mapping each counterparty to an index CDS credit grade.
LGDs are based on the specific circumstances of the counterparty and take into account valuation of offsetting security, where applicable. For
smaller exposures where security valuations are not individually assessed, an LGD of 60% is applied (2023: 60%).
FVA is calculated as: Expected exposure ('EE') multiplied by funding spread ('FS') multiplied by counterpart survival probability (1-PD). EE profiles
(net of expected positive and negative exposures) are generated at a counterparty netting set through simulation. Funding spreads used are an
average implied by CDSs for the Group\u2019s most active external derivative counterparties. The rationale in applying these spreads is to best estimate
the FVA which a counterparty would apply in a transaction to close out the Group\u2019s existing positions.
Where XVA valuation adjustments have been applied to a derivative instrument, the entire instrument is classified as Level 3 in the fair value
hierarchy where a not insignificant component of the XVA valuation is derived from unobservable inputs.
Within t he range of estimates and fair value sensitivity measurements, a favourable and an adverse scenario have been selected for PDs and
LGDs for CVA. The favourable/adverse scenario for customer PDs are (i) a single rating upgrade and (ii) a single rating downgrade, respectively.
Customer LGDs are shifted according to estimates of improvement in value of security compared with potential derivatives market values. Within
the combination of LGD and PD, both are shifted together yielding positive and negative valuations which are disclosed as potential alternative
valuations. See 'Significant unobservable inputs' within this note. For FVA, an adverse scenario is the use of the bond yields of the Group\u2019s most
active derivative counterparties while a favourable scenario is an upgrade in the CDS of the reference entities used to derive funding spreads.
43\u00a0 Fair value of financial instruments continued
(iii) Investment securities
The fair value of investment securities has been estimated based on expected sale proceeds. The expected sale proceeds are based on bid prices
which have been analysed and compared across multiple sources for reliability. Where bid prices are unavailable, fair values are estimated by
valuation techniques using observable market data for similar instruments. Where there is no market data for a directly comparable instrument,
management judgement on an appropriate credit spread to similar or related instruments with market data available is used within the valuation
technique. This is supported by cross referencing other similar or related instruments.
(iv) Loans and advances to customers
The Group provides lending facilities of varying rates and maturities to corporate and personal customers. Valuation techniques are used in
estimating the fair value of loans, primarily using discounted cash flows and applying market rates where practicable and taking credit risk into account.
The majority of loans and advances to customers are held at amortised cost, however, the Group has a small number of loans and advances which are
required to be measured at FVTPL having failed the SPPI test. The valuation techniques used apply equally to those held at FVTPL and those
held at amortised cost.
A key assumption for determining the fair value of loans and advances is that the carrying amount of variable rate loans (excluding mortgage
products) approximates to market value. For fixed rate loans, the fair value is calculated by discounting expected cash flows using discount rates
that reflect the interest rate risk in that portfolio.
The fair value of mortgage products, including tracker mortgages, is calculated by discounting expected cash flows using discount rates that reflect
the interest rate/credit risk in the portfolio.
(v) Virtual corporate power purchase agreement
The fair value of the virtual corporate power purchase agreement is estimated using discounted cash flows applying market rates when available
and rates offered by other data providers, in particular for forward Irish electricity solar pricing curves.
Financial instruments not measured at fair value but with fair value information presented separately in the notes to the
financial\u00a0statements
(i) Loans and advances to banks
The fair value of loans and advances to banks is estimated using discounted cash flows applying either market rates, where practicable, or rates
currently offered by other financial institutions for placings with similar characteristics.
(ii) Loans and advances to customers at amortised cost
See methodology above under the heading \u2018Loans and advances to customers\u2019.
(iii) Securities financing
The fair value of securities financing assets and liabilities approximate their carrying amount as these balances are generally short-dated and
fully\u00a0collateralised.
(iv) Deposits by central banks and banks and customer accounts
The fair value of current accounts and deposit liabilities which are repayable on demand, or which re-price frequently, approximates to their
book\u00a0value. The fair value of all other deposits and other borrowings is estimated using discounted cash flows and applying applicable market
rates as appropriate.
(v) Subordinated liabilities and debt securities in issue
The estimated fair value of subordinated liabilities and other capital instruments and debt securities in issue, is based on quoted prices where
available, or where these are unavailable, are estimated using valuation techniques using observable market data for similar instruments.
Where\u00a0there is no market data for a directly comparable instrument, management judgement, on an appropriate credit spread to similar or
related\u00a0instruments with market data available, is used within the valuation technique. This is supported by cross-referencing other similar or
related\u00a0instruments.
(vi) Other financial assets and other financial liabilities
This caption includes accrued interest receivable and payable and other receivables (including amounts awaiting settlement and accounts
payable). The carrying amount is considered representative of fair value.
(vii) Commitments pertaining to credit-related instruments
Details of the various credit-related commitments and other off-balance sheet financial guarantees entered into by the Group are included in
note\u00a039. The ECL is considered a reasonable approximation of fair value of these credit-related financial instruments.
43\u00a0 Fair value of financial instruments continued
The table below sets out the carrying amount and fair value of financial instruments across the three levels of the fair value hierarchy at
31\u00a0December 2024 and 2023:
2024
2023
Carrying
amount
Fair Value
Carrying
amount
Fair Value
Fair value hierarchy
Fair value hierarchy
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets measured at fair value
Trading portfolio financial assets
136
136
\u2014
\u2014
136
93
93
\u2014
\u2014
93
Derivative financial instruments:
Interest rate derivatives1
2,109
\u2014
2,020
89
2,109
2,351
\u2014
2,234
117
2,351
Exchange rate derivatives
35
\u2014
35
\u2014
35
14
\u2014
14
\u2014
14
Forward contract to acquire loans2
\u2014
\u2014
\u2014
\u2014
\u2014
12
\u2014
\u2014
12
12
Loans and advances to customers at FVTPL
64
\u2014
\u2014
64
64
42
\u2014
\u2014
42
42
Investment debt securities at FVOCI
13,568
13,468
100
\u2014
13,568
12,488
12,411
77
\u2014
12,488
Equity investments at FVTPL
297
1
\u2014
296
297
355
15
\u2014
340
355
16,209
13,605
2,155
449
16,209
15,355
12,519
2,325
511
15,355
Financial assets not measured at fair value
Cash and balances at central banks
37,315
664
3
36,651
\u2014
37,315
38,018
598
3
37,420
\u2014
38,018
Loans and advances to banks
1,321
\u2014
241
1,080
1,321
1,329
\u2014
259
1,070
1,329
Loans and advances to customers:
Mortgages4
36,722
\u2014
\u2014
35,832
35,832
34,472
\u2014
\u2014
33,459
33,459
Non-mortgages
33,103
\u2014
\u2014
33,043
33,043
30,977
\u2014
\u2014
30,909
30,909
Securities financing
6,643
\u2014
\u2014
6,643
6,643
6,466
\u2014
\u2014
6,466
6,466
Investment debt securities measured at
amortised\u00a0cost
4,803
2,633
\u2014
2,168
4,801
4,510
\u2014
2,566
\u2014
1,971
4,537
Other financial assets
894
\u2014
\u2014
894
894
688
\u2014
\u2014
688
688
120,801
3,297
36,892
79,660
119,849
116,460
3,164
37,679
74,563
115,406
Financial liabilities measured at fair value
Trading portfolio financial liabilities
262
262
\u2014
\u2014
262
139
139
\u2014
\u2014
139
Derivative financial instruments:
Interest rate derivatives1
1,689
\u2014
1,391
298
1,689
1,869
\u2014
1,563
306
1,869
Exchange rate derivatives
112
\u2014
112
\u2014
112
29
\u2014
28
1
29
Equity derivatives
\u2014
\u2014
\u2014
\u2014
\u2014
1
\u2014
1
\u2014
1
Credit derivatives
3
\u2014
3
\u2014
3
3
\u2014
3
\u2014
3
Virtual corporate power purchase agreement
3
\u2014
\u2014
3
3
\u2014
\u2014
\u2014
\u2014
\u2014
2,069
262
1,506
301
2,069
2,041
139
1,595
307
2,041
Financial liabilities not measured at fair value
Deposits by central banks and banks
836
\u2014
6
830
836
1,780
\u2014
740
1,040
1,780
Customer accounts:
Current accounts
62,657
\u2014
\u2014
62,657
62,657
62,928
\u2014
\u2014
62,928
62,928
Demand deposits
31,126
\u2014
\u2014
31,126
31,126
32,083
\u2014
\u2014
32,083
32,083
Time deposits
16,100
\u2014
\u2014
16,150
16,150
9,771
\u2014
\u2014
9,755
9,755
Securities financing
196
\u2014
\u2014
196
196
575
\u2014
\u2014
575
575
Debt securities in issue
8,832
8,074
\u2014
957
9,031
8,423
8,573
\u2014
28
8,601
Subordinated liabilities and other capital
instruments
1,627
1,662
\u2014
\u2014
1,662
1,473
1,497
\u2014
13
1,510
Other financial liabilities5
1,792
\u2014
\u2014
1,792
1,792
1,571
\u2014
\u2014
1,571
1,571
Loan commitments and other credit related
commitments
44
\u2014
\u2014
44
44
43
\u2014
\u2014
43
43
Financial guarantees
13
\u2014
\u2014
13
13
16
\u2014
\u2014
16
16
123,223
9,736
6
113,765
123,507
118,663
10,070
740
108,052
118,862
1. Includes \u20ac 43 million (2023: \u20ac 84 million) derivative assets and \u20ac 257 million (2023: \u20ac 262 million) derivative liabilities categorised as level 3 where a not insignificant
component of the XVA valuation is derived from unobservable inputs.
2. Relates to the forward contract to acquire Ulster Bank tracker (and linked) mortgages. See \u2018Ulster Bank forward contract \u2013 tracker (and linked) mortgages\u2019 below for
further information.
3. Comprises cash on hand.
4. Includes residential and commercial mortgages.
5. Includes \u20ac 64 million of fair value changes of hedged items in portfolio hedges of interest rate risk.\u00a0
43\u00a0 Fair value of financial instruments continued
Significant transfers between Level 1 and Level 2 of the fair value hierarchy
There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy for the years ended 31 December 2024 and\u00a02023.
Reconciliation of balances in Level 3 of the fair value hierarchy
The following table shows (i) a reconciliation from the opening balances to the closing balances for fair value measurements in Level 3 of the
fair\u00a0value hierarchy and (ii) total unrealised gains or losses included in profit or loss that is attributable to the assets and liabilities categorised
as\u00a0Level 3 in the fair value hierarchy at the end of the year.
2024
Financial assets
Financial liabilities
Derivatives
Loans
and
advances
at FVTPL
Equities
at FVTPL
Total
Derivatives
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2024
129
42
340
511
307
307
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 losses
(40)
\u2014
\u2014
(40)
(6)
(6)
Net change in FVTPL
\u2014
11
76
87
\u2014
\u2014
(40)
11
76
47
(6)
(6)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
26
46
72
\u2014
\u2014
Sales/disposals/redemptions
\u2014
\u2014
(166)
(166)
\u2014
\u2014
Cash received:
Principal
\u2014
(15)
\u2014
(15)
\u2014
\u2014
At 31 December 2024
89
64
296
449
301
301
Total unrealised gains or (losses) included in profit or loss for
assets and liabilities classified as level 3 at the end of the year
Net trading income \u2013 losses
(15)
\u2014
\u2014
(15)
(35)
(35)
Gains on equity investments at FVTPL
\u2014
\u2014
35
35
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(3)
\u2014
(3)
\u2014
\u2014
(15)
(3)
35
17
(35)
(35)
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Reconciliation of balances in Level 3 of the fair value hierarchy
2023
Financial assets
Financial liabilities
Derivative
s
Loans and
advances
at FVTPL
Equities at
FVTPL
Total
Derivative
s
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2023
88
249
284
621
432
432
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 gains/(losses)
41
\u2014
\u2014
41
(125)
(125)
Net change in FVTPL
\u2014
3
30
33
\u2014
\u2014
41
3
30
74
(125)
(125)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
20
35
55
\u2014
\u2014
Sales/disposals
\u2014
(135)
(9)
(144)
\u2014
\u2014
Cash received:
Principal
\u2014
(95)
\u2014
(95)
\u2014
\u2014
At 31 December 2023
129
42
340
511
307
307
Total unrealised gains or losses included in profit or loss for
assets\u00a0and liabilities classified as level 3 at the end of the year
Net trading income \u2013 gains
71
\u2014
\u2014
71
76
76
Gains on equity investments at FVTPL
\u2014
\u2014
27
27
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(15)
\u2014
(15)
\u2014
\u2014
71
(15)
27
83
76
76
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Significant unobservable inputs
The table below sets out information about significant unobservable inputs used in measuring financial instruments categorised as Level 3 in the
fair value hierarchy:
Fair value
Range of estimates
Financial instrument
2024
\u20ac m
2023
\u20ac m
Valuation
technique
Significant
unobservable input
31 December
2024
31 December
2023
Uncollateralised customer
derivatives
Asset
89
117
CVA
LGD
38% - 56%
41% - 59%
Liability
298
307
(Base 46%)
(Base 49%)
PD
0.4% - 1.8%
0.4% - 1.9%
(Base 0.8% 1-year PD)
(Base 0.9% 1-year PD)
FVA
Funding spreads
(0.2%) - 0.3%
(0.1%) - 0.3%
Forward contract to acquire
loans
Asset
\u2014
12
Discounted
Expected Future
Cash flows
PD
n/a
(0.25%) - 0.25%
Discount Yield
n/a
(0.1%) - 0.1%
Virtual corporate power
purchase agreement
Liability
3
\u2014
Discounted
Expected Future
Cash flows
Irish electricity prices
(10%) - 20%
n/a
Visa Inc. Series B Preferred
Stock1
Asset
16
41
Quoted market
price (to which a
discount has been
applied)
Final conversion rate
0% - 90%
0% - 90%
1. Sensitivity information has not been provided for other equity investments as the portfolio comprises several investments, none of which is individually material.
Uncollateralised customer derivatives
Derivatives (assets and liabilities) include negative XVA valuation adjustments amounting to net \u20ac 8 million (2023: \u20ac\u00a012\u00a0million). The sensitivity to
unobservable inputs for this XVA valuation adjustment at 31 December 2024 ranges from (i) negative \u20ac\u00a05 million to positive \u20ac 3 million for CVA
(2023: negative \u20ac 9 million to positive \u20ac 4 million) and (ii) negative \u20ac 1 million to positive \u20ac\u00a01\u00a0million for FVA (2023: negative \u20ac 2 million to positive
\u20ac\u00a01 million).
A number of derivatives are subject to valuation methodologies which use unobservable inputs. As the variability of the valuation is not greater
than \u20ac 1 million in any individual case or collectively, the detail is not disclosed here.
Forward contract to acquire loans
In 2023, the Group recognised a forward contract to acquire Ulster Bank tracker (and linked) mortgages. The transfer of the loans completed in
September 2024.\u00a0 At 31 December 2023 the fair value sensitivity to unobservable inputs ranged from negative \u20ac 4.8 million to positive \u20ac 5.4 million
for PDs and negative \u20ac 3.2 million to positive \u20ac 3.2 million for discount yield.
Virtual corporate power purchase agreement
During 2024 the Group entered into a virtual corporate power purchase agreement with NTR to construct two solar farms in Co. Wexford to supply
electricity to the Group. This agreement meets the definition of a derivative and had a negative fair value of \u20ac 3 million at 31 December 2024 (31
December 2023: Nil). Its valuation is subject to valuation methodologies which use unobservable inputs. The most significant unobservable input is
forward Irish electricity solar capture prices. The fair value sensitivity to this input ranges from negative \u20ac 4 million to positive \u20ac 2 million
(31\u00a0December 2023: Nil).
43\u00a0 Fair value of financial instruments continued
Visa Inc. Series B Preferred Stock
In June 2016, the Group received Series B Preferred Stock in Visa Inc. with a fair value of \u20ac 65 million as part consideration for its holding of
shares in Visa Europe. The preferred stock will be convertible into Class A Common Stock of Visa Inc. over time, with partial conversions having
occurred in 2020, 2022 and 2024. The remaining conversion is subject to certain Visa Europe litigation risks that may affect the ultimate
conversion rate. In addition, the stock, being denominated in US Dollars, is subject to foreign exchange risk.
\u2013\u00a0 Valuation technique: Quoted market price of Visa Inc. Class A Common Stock to which a discount has been applied for the illiquidity and the
conversion rate variability of the preferred stock of Visa Inc. 62% haircut (2023: 56%). This was converted at the year end exchange rate.
\u2013\u00a0 Unobservable input: Final conversion rate of Visa Inc. Series B Preferred Stock into Visa Inc. Class A Common Stock.
\u2013\u00a0 Range of estimates: Estimates range from (a) no discount for conversion rate variability with a discount for illiquidity only; to (b) 90% discount
for conversion rate variability.
The fair value measurement sensitivity to unobservable discount rates ranges from negative \u20ac 16 million to positive \u20ac 21 million at 31 December
2024 (2023: negative \u20ac 31 million to positive of \u20ac 23 million).
Loans and advances to customers measured at FVTPL
For loans and advances to customers measured at FVTPL of \u20ac 64 million (2023: \u20ac 42 million), categorised within Level 3 of the fair value hierarchy
in 2024 and 2023, the Group does not believe that a reasonably possible change to alternative assumptions would change fair value significantly
and therefore has not disclosed those amounts in the table above or provided the related disclosures.\u00a0
Fair value is applied in respect of secondary facilities arising on restructured loans subject to forbearance measures, on the likelihood that additional
cash flows, in excess of their primary facilitates, will be received from customers. Given the significant uncertainty with regard to such cash flows,
the Group does not attribute a fair value unless it is reasonably certain that this value will be realised.
Day 1 gain or loss
No difference existed between the fair value at initial recognition of financial instruments and the amount that was determined at that date using a
valuation technique incorporating significant unobservable data.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-662": { "value": "
43\u00a0 Fair value of financial instruments
The term \u2018financial instruments\u2019 includes both financial assets and financial liabilities. The fair value of a financial instrument is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the
principal market, or in its absence, the most advantageous market to which the Group has access at that date. The Group\u2019s accounting policy for
the \u2018determination of fair value of financial instruments\u2019 is set out in note 1 accounting policy (m).
The valuation of financial instruments, including loans and advances, involves the application of judgement and estimation. Market and credit risks
are key assumptions in the estimation of the fair value of loans and advances. The Group has estimated the fair value of its loans to customers
taking into account market risk and the changes in credit quality of its borrowers.
Fair values are based on observable market prices where available, and on valuation models or techniques where the lack of market liquidity
means that observable prices are unavailable. The fair values of financial instruments are classified according to the following fair value hierarchy
that reflects the observability of significant market inputs:
Level 1 \u2013 financial assets and liabilities measured using quoted market prices from an active market (unadjusted);
Level 2 \u2013 financial assets and liabilities measured using valuation techniques which use quoted market prices from an active market or measured
using quoted market prices unadjusted from an inactive market; and
Level 3 \u2013 financial assets and liabilities measured using valuation techniques which use unobservable market inputs.
All valuations are carried out within the Finance function and valuation methodologies are validated by the independent Risk function within the
Group. Readers of these financial statements are advised to use caution when using the data in the following tables to evaluate the Group\u2019s
financial position or to make comparisons with other institutions. Fair value information is not provided for items that do not meet the definition
of\u00a0a\u00a0financial instrument.
Methodologies used for the calculation of fair value
The methods used for calculation of fair value in 2024 are as follows:
Financial instruments measured at fair value in the financial statements
(i) Trading portfolio financial instruments
The fair value of trading debt securities, together with quoted equity shares is based on quoted prices or bid/offer quotations sourced from external
securities dealers, where these are available on an active market. Where securities and equities are traded on an exchange, the fair value is based
on prices from the exchange.
(ii) Derivative financial instruments
Where derivatives are traded on an exchange, the fair value is based on prices from the exchange. The fair value of over-the-counter derivative
financial instruments is estimated based on standard market discounting and valuation methodologies which use reliable observable inputs
including yield curves and market rates. These methodologies are implemented by the Finance function and validated by the Risk function. Where
there is uncertainty around the inputs to a derivative\u2019s valuation model, the fair value is estimated using inputs which provide the Group\u2019s view of
the most likely outcome in a disposal transaction between willing counterparties in a functioning market. Where an unobservable input is material
to the outcome of the valuation, a range of potential outcomes from favourable to unfavourable is estimated.
Counterparty valuation adjustment ('CVA') and Funding valuation adjustment ('FVA') are applied to all uncollateralised over-the-counter derivatives.
The combination of CVA and FVA is referred to as XVA.
CVA is calculated as: Expected positive exposure ('EPE') multiplied by probability of default ('PD') multiplied by loss given default ('LGD').
EPE\u00a0profiles are generated at a counterparty netting set through simulation. PDs are derived from market based credit default swaps ('CDS')
information. As most counterparties do not have a quoted CDS, PDs are derived by mapping each counterparty to an index CDS credit grade.
LGDs are based on the specific circumstances of the counterparty and take into account valuation of offsetting security, where applicable. For
smaller exposures where security valuations are not individually assessed, an LGD of 60% is applied (2023: 60%).
FVA is calculated as: Expected exposure ('EE') multiplied by funding spread ('FS') multiplied by counterpart survival probability (1-PD). EE profiles
(net of expected positive and negative exposures) are generated at a counterparty netting set through simulation. Funding spreads used are an
average implied by CDSs for the Group\u2019s most active external derivative counterparties. The rationale in applying these spreads is to best estimate
the FVA which a counterparty would apply in a transaction to close out the Group\u2019s existing positions.
Where XVA valuation adjustments have been applied to a derivative instrument, the entire instrument is classified as Level 3 in the fair value
hierarchy where a not insignificant component of the XVA valuation is derived from unobservable inputs.
Within t he range of estimates and fair value sensitivity measurements, a favourable and an adverse scenario have been selected for PDs and
LGDs for CVA. The favourable/adverse scenario for customer PDs are (i) a single rating upgrade and (ii) a single rating downgrade, respectively.
Customer LGDs are shifted according to estimates of improvement in value of security compared with potential derivatives market values. Within
the combination of LGD and PD, both are shifted together yielding positive and negative valuations which are disclosed as potential alternative
valuations. See 'Significant unobservable inputs' within this note. For FVA, an adverse scenario is the use of the bond yields of the Group\u2019s most
active derivative counterparties while a favourable scenario is an upgrade in the CDS of the reference entities used to derive funding spreads.
43\u00a0 Fair value of financial instruments continued
(iii) Investment securities
The fair value of investment securities has been estimated based on expected sale proceeds. The expected sale proceeds are based on bid prices
which have been analysed and compared across multiple sources for reliability. Where bid prices are unavailable, fair values are estimated by
valuation techniques using observable market data for similar instruments. Where there is no market data for a directly comparable instrument,
management judgement on an appropriate credit spread to similar or related instruments with market data available is used within the valuation
technique. This is supported by cross referencing other similar or related instruments.
(iv) Loans and advances to customers
The Group provides lending facilities of varying rates and maturities to corporate and personal customers. Valuation techniques are used in
estimating the fair value of loans, primarily using discounted cash flows and applying market rates where practicable and taking credit risk into account.
The majority of loans and advances to customers are held at amortised cost, however, the Group has a small number of loans and advances which are
required to be measured at FVTPL having failed the SPPI test. The valuation techniques used apply equally to those held at FVTPL and those
held at amortised cost.
A key assumption for determining the fair value of loans and advances is that the carrying amount of variable rate loans (excluding mortgage
products) approximates to market value. For fixed rate loans, the fair value is calculated by discounting expected cash flows using discount rates
that reflect the interest rate risk in that portfolio.
The fair value of mortgage products, including tracker mortgages, is calculated by discounting expected cash flows using discount rates that reflect
the interest rate/credit risk in the portfolio.
(v) Virtual corporate power purchase agreement
The fair value of the virtual corporate power purchase agreement is estimated using discounted cash flows applying market rates when available
and rates offered by other data providers, in particular for forward Irish electricity solar pricing curves.
Financial instruments not measured at fair value but with fair value information presented separately in the notes to the
financial\u00a0statements
(i) Loans and advances to banks
The fair value of loans and advances to banks is estimated using discounted cash flows applying either market rates, where practicable, or rates
currently offered by other financial institutions for placings with similar characteristics.
(ii) Loans and advances to customers at amortised cost
See methodology above under the heading \u2018Loans and advances to customers\u2019.
(iii) Securities financing
The fair value of securities financing assets and liabilities approximate their carrying amount as these balances are generally short-dated and
fully\u00a0collateralised.
(iv) Deposits by central banks and banks and customer accounts
The fair value of current accounts and deposit liabilities which are repayable on demand, or which re-price frequently, approximates to their
book\u00a0value. The fair value of all other deposits and other borrowings is estimated using discounted cash flows and applying applicable market
rates as appropriate.
(v) Subordinated liabilities and debt securities in issue
The estimated fair value of subordinated liabilities and other capital instruments and debt securities in issue, is based on quoted prices where
available, or where these are unavailable, are estimated using valuation techniques using observable market data for similar instruments.
Where\u00a0there is no market data for a directly comparable instrument, management judgement, on an appropriate credit spread to similar or
related\u00a0instruments with market data available, is used within the valuation technique. This is supported by cross-referencing other similar or
related\u00a0instruments.
(vi) Other financial assets and other financial liabilities
This caption includes accrued interest receivable and payable and other receivables (including amounts awaiting settlement and accounts
payable). The carrying amount is considered representative of fair value.
(vii) Commitments pertaining to credit-related instruments
Details of the various credit-related commitments and other off-balance sheet financial guarantees entered into by the Group are included in
note\u00a039. The ECL is considered a reasonable approximation of fair value of these credit-related financial instruments.
43\u00a0 Fair value of financial instruments continued
The table below sets out the carrying amount and fair value of financial instruments across the three levels of the fair value hierarchy at
31\u00a0December 2024 and 2023:
2024
2023
Carrying
amount
Fair Value
Carrying
amount
Fair Value
Fair value hierarchy
Fair value hierarchy
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets measured at fair value
Trading portfolio financial assets
136
136
\u2014
\u2014
136
93
93
\u2014
\u2014
93
Derivative financial instruments:
Interest rate derivatives1
2,109
\u2014
2,020
89
2,109
2,351
\u2014
2,234
117
2,351
Exchange rate derivatives
35
\u2014
35
\u2014
35
14
\u2014
14
\u2014
14
Forward contract to acquire loans2
\u2014
\u2014
\u2014
\u2014
\u2014
12
\u2014
\u2014
12
12
Loans and advances to customers at FVTPL
64
\u2014
\u2014
64
64
42
\u2014
\u2014
42
42
Investment debt securities at FVOCI
13,568
13,468
100
\u2014
13,568
12,488
12,411
77
\u2014
12,488
Equity investments at FVTPL
297
1
\u2014
296
297
355
15
\u2014
340
355
16,209
13,605
2,155
449
16,209
15,355
12,519
2,325
511
15,355
Financial assets not measured at fair value
Cash and balances at central banks
37,315
664
3
36,651
\u2014
37,315
38,018
598
3
37,420
\u2014
38,018
Loans and advances to banks
1,321
\u2014
241
1,080
1,321
1,329
\u2014
259
1,070
1,329
Loans and advances to customers:
Mortgages4
36,722
\u2014
\u2014
35,832
35,832
34,472
\u2014
\u2014
33,459
33,459
Non-mortgages
33,103
\u2014
\u2014
33,043
33,043
30,977
\u2014
\u2014
30,909
30,909
Securities financing
6,643
\u2014
\u2014
6,643
6,643
6,466
\u2014
\u2014
6,466
6,466
Investment debt securities measured at
amortised\u00a0cost
4,803
2,633
\u2014
2,168
4,801
4,510
\u2014
2,566
\u2014
1,971
4,537
Other financial assets
894
\u2014
\u2014
894
894
688
\u2014
\u2014
688
688
120,801
3,297
36,892
79,660
119,849
116,460
3,164
37,679
74,563
115,406
Financial liabilities measured at fair value
Trading portfolio financial liabilities
262
262
\u2014
\u2014
262
139
139
\u2014
\u2014
139
Derivative financial instruments:
Interest rate derivatives1
1,689
\u2014
1,391
298
1,689
1,869
\u2014
1,563
306
1,869
Exchange rate derivatives
112
\u2014
112
\u2014
112
29
\u2014
28
1
29
Equity derivatives
\u2014
\u2014
\u2014
\u2014
\u2014
1
\u2014
1
\u2014
1
Credit derivatives
3
\u2014
3
\u2014
3
3
\u2014
3
\u2014
3
Virtual corporate power purchase agreement
3
\u2014
\u2014
3
3
\u2014
\u2014
\u2014
\u2014
\u2014
2,069
262
1,506
301
2,069
2,041
139
1,595
307
2,041
Financial liabilities not measured at fair value
Deposits by central banks and banks
836
\u2014
6
830
836
1,780
\u2014
740
1,040
1,780
Customer accounts:
Current accounts
62,657
\u2014
\u2014
62,657
62,657
62,928
\u2014
\u2014
62,928
62,928
Demand deposits
31,126
\u2014
\u2014
31,126
31,126
32,083
\u2014
\u2014
32,083
32,083
Time deposits
16,100
\u2014
\u2014
16,150
16,150
9,771
\u2014
\u2014
9,755
9,755
Securities financing
196
\u2014
\u2014
196
196
575
\u2014
\u2014
575
575
Debt securities in issue
8,832
8,074
\u2014
957
9,031
8,423
8,573
\u2014
28
8,601
Subordinated liabilities and other capital
instruments
1,627
1,662
\u2014
\u2014
1,662
1,473
1,497
\u2014
13
1,510
Other financial liabilities5
1,792
\u2014
\u2014
1,792
1,792
1,571
\u2014
\u2014
1,571
1,571
Loan commitments and other credit related
commitments
44
\u2014
\u2014
44
44
43
\u2014
\u2014
43
43
Financial guarantees
13
\u2014
\u2014
13
13
16
\u2014
\u2014
16
16
123,223
9,736
6
113,765
123,507
118,663
10,070
740
108,052
118,862
1. Includes \u20ac 43 million (2023: \u20ac 84 million) derivative assets and \u20ac 257 million (2023: \u20ac 262 million) derivative liabilities categorised as level 3 where a not insignificant
component of the XVA valuation is derived from unobservable inputs.
2. Relates to the forward contract to acquire Ulster Bank tracker (and linked) mortgages. See \u2018Ulster Bank forward contract \u2013 tracker (and linked) mortgages\u2019 below for
further information.
3. Comprises cash on hand.
4. Includes residential and commercial mortgages.
5. Includes \u20ac 64 million of fair value changes of hedged items in portfolio hedges of interest rate risk.\u00a0
43\u00a0 Fair value of financial instruments continued
Significant transfers between Level 1 and Level 2 of the fair value hierarchy
There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy for the years ended 31 December 2024 and\u00a02023.
Reconciliation of balances in Level 3 of the fair value hierarchy
The following table shows (i) a reconciliation from the opening balances to the closing balances for fair value measurements in Level 3 of the
fair\u00a0value hierarchy and (ii) total unrealised gains or losses included in profit or loss that is attributable to the assets and liabilities categorised
as\u00a0Level 3 in the fair value hierarchy at the end of the year.
2024
Financial assets
Financial liabilities
Derivatives
Loans
and
advances
at FVTPL
Equities
at FVTPL
Total
Derivatives
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2024
129
42
340
511
307
307
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 losses
(40)
\u2014
\u2014
(40)
(6)
(6)
Net change in FVTPL
\u2014
11
76
87
\u2014
\u2014
(40)
11
76
47
(6)
(6)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
26
46
72
\u2014
\u2014
Sales/disposals/redemptions
\u2014
\u2014
(166)
(166)
\u2014
\u2014
Cash received:
Principal
\u2014
(15)
\u2014
(15)
\u2014
\u2014
At 31 December 2024
89
64
296
449
301
301
Total unrealised gains or (losses) included in profit or loss for
assets and liabilities classified as level 3 at the end of the year
Net trading income \u2013 losses
(15)
\u2014
\u2014
(15)
(35)
(35)
Gains on equity investments at FVTPL
\u2014
\u2014
35
35
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(3)
\u2014
(3)
\u2014
\u2014
(15)
(3)
35
17
(35)
(35)
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Reconciliation of balances in Level 3 of the fair value hierarchy
2023
Financial assets
Financial liabilities
Derivative
s
Loans and
advances
at FVTPL
Equities at
FVTPL
Total
Derivative
s
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2023
88
249
284
621
432
432
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 gains/(losses)
41
\u2014
\u2014
41
(125)
(125)
Net change in FVTPL
\u2014
3
30
33
\u2014
\u2014
41
3
30
74
(125)
(125)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
20
35
55
\u2014
\u2014
Sales/disposals
\u2014
(135)
(9)
(144)
\u2014
\u2014
Cash received:
Principal
\u2014
(95)
\u2014
(95)
\u2014
\u2014
At 31 December 2023
129
42
340
511
307
307
Total unrealised gains or losses included in profit or loss for
assets\u00a0and liabilities classified as level 3 at the end of the year
Net trading income \u2013 gains
71
\u2014
\u2014
71
76
76
Gains on equity investments at FVTPL
\u2014
\u2014
27
27
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(15)
\u2014
(15)
\u2014
\u2014
71
(15)
27
83
76
76
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Significant unobservable inputs
The table below sets out information about significant unobservable inputs used in measuring financial instruments categorised as Level 3 in the
fair value hierarchy:
Fair value
Range of estimates
Financial instrument
2024
\u20ac m
2023
\u20ac m
Valuation
technique
Significant
unobservable input
31 December
2024
31 December
2023
Uncollateralised customer
derivatives
Asset
89
117
CVA
LGD
38% - 56%
41% - 59%
Liability
298
307
(Base 46%)
(Base 49%)
PD
0.4% - 1.8%
0.4% - 1.9%
(Base 0.8% 1-year PD)
(Base 0.9% 1-year PD)
FVA
Funding spreads
(0.2%) - 0.3%
(0.1%) - 0.3%
Forward contract to acquire
loans
Asset
\u2014
12
Discounted
Expected Future
Cash flows
PD
n/a
(0.25%) - 0.25%
Discount Yield
n/a
(0.1%) - 0.1%
Virtual corporate power
purchase agreement
Liability
3
\u2014
Discounted
Expected Future
Cash flows
Irish electricity prices
(10%) - 20%
n/a
Visa Inc. Series B Preferred
Stock1
Asset
16
41
Quoted market
price (to which a
discount has been
applied)
Final conversion rate
0% - 90%
0% - 90%
1. Sensitivity information has not been provided for other equity investments as the portfolio comprises several investments, none of which is individually material.
Uncollateralised customer derivatives
Derivatives (assets and liabilities) include negative XVA valuation adjustments amounting to net \u20ac 8 million (2023: \u20ac\u00a012\u00a0million). The sensitivity to
unobservable inputs for this XVA valuation adjustment at 31 December 2024 ranges from (i) negative \u20ac\u00a05 million to positive \u20ac 3 million for CVA
(2023: negative \u20ac 9 million to positive \u20ac 4 million) and (ii) negative \u20ac 1 million to positive \u20ac\u00a01\u00a0million for FVA (2023: negative \u20ac 2 million to positive
\u20ac\u00a01 million).
A number of derivatives are subject to valuation methodologies which use unobservable inputs. As the variability of the valuation is not greater
than \u20ac 1 million in any individual case or collectively, the detail is not disclosed here.
Forward contract to acquire loans
In 2023, the Group recognised a forward contract to acquire Ulster Bank tracker (and linked) mortgages. The transfer of the loans completed in
September 2024.\u00a0 At 31 December 2023 the fair value sensitivity to unobservable inputs ranged from negative \u20ac 4.8 million to positive \u20ac 5.4 million
for PDs and negative \u20ac 3.2 million to positive \u20ac 3.2 million for discount yield.
Virtual corporate power purchase agreement
During 2024 the Group entered into a virtual corporate power purchase agreement with NTR to construct two solar farms in Co. Wexford to supply
electricity to the Group. This agreement meets the definition of a derivative and had a negative fair value of \u20ac 3 million at 31 December 2024 (31
December 2023: Nil). Its valuation is subject to valuation methodologies which use unobservable inputs. The most significant unobservable input is
forward Irish electricity solar capture prices. The fair value sensitivity to this input ranges from negative \u20ac 4 million to positive \u20ac 2 million
(31\u00a0December 2023: Nil).
43\u00a0 Fair value of financial instruments continued
Visa Inc. Series B Preferred Stock
In June 2016, the Group received Series B Preferred Stock in Visa Inc. with a fair value of \u20ac 65 million as part consideration for its holding of
shares in Visa Europe. The preferred stock will be convertible into Class A Common Stock of Visa Inc. over time, with partial conversions having
occurred in 2020, 2022 and 2024. The remaining conversion is subject to certain Visa Europe litigation risks that may affect the ultimate
conversion rate. In addition, the stock, being denominated in US Dollars, is subject to foreign exchange risk.
\u2013\u00a0 Valuation technique: Quoted market price of Visa Inc. Class A Common Stock to which a discount has been applied for the illiquidity and the
conversion rate variability of the preferred stock of Visa Inc. 62% haircut (2023: 56%). This was converted at the year end exchange rate.
\u2013\u00a0 Unobservable input: Final conversion rate of Visa Inc. Series B Preferred Stock into Visa Inc. Class A Common Stock.
\u2013\u00a0 Range of estimates: Estimates range from (a) no discount for conversion rate variability with a discount for illiquidity only; to (b) 90% discount
for conversion rate variability.
The fair value measurement sensitivity to unobservable discount rates ranges from negative \u20ac 16 million to positive \u20ac 21 million at 31 December
2024 (2023: negative \u20ac 31 million to positive of \u20ac 23 million).
Loans and advances to customers measured at FVTPL
For loans and advances to customers measured at FVTPL of \u20ac 64 million (2023: \u20ac 42 million), categorised within Level 3 of the fair value hierarchy
in 2024 and 2023, the Group does not believe that a reasonably possible change to alternative assumptions would change fair value significantly
and therefore has not disclosed those amounts in the table above or provided the related disclosures.\u00a0
Fair value is applied in respect of secondary facilities arising on restructured loans subject to forbearance measures, on the likelihood that additional
cash flows, in excess of their primary facilitates, will be received from customers. Given the significant uncertainty with regard to such cash flows,
the Group does not attribute a fair value unless it is reasonably certain that this value will be realised.
Day 1 gain or loss
No difference existed between the fair value at initial recognition of financial instruments and the amount that was determined at that date using a
valuation technique incorporating significant unobservable data.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-661": { "value": "
43\u00a0 Fair value of financial instruments
The term \u2018financial instruments\u2019 includes both financial assets and financial liabilities. The fair value of a financial instrument is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the
principal market, or in its absence, the most advantageous market to which the Group has access at that date. The Group\u2019s accounting policy for
the \u2018determination of fair value of financial instruments\u2019 is set out in note 1 accounting policy (m).
The valuation of financial instruments, including loans and advances, involves the application of judgement and estimation. Market and credit risks
are key assumptions in the estimation of the fair value of loans and advances. The Group has estimated the fair value of its loans to customers
taking into account market risk and the changes in credit quality of its borrowers.
Fair values are based on observable market prices where available, and on valuation models or techniques where the lack of market liquidity
means that observable prices are unavailable. The fair values of financial instruments are classified according to the following fair value hierarchy
that reflects the observability of significant market inputs:
Level 1 \u2013 financial assets and liabilities measured using quoted market prices from an active market (unadjusted);
Level 2 \u2013 financial assets and liabilities measured using valuation techniques which use quoted market prices from an active market or measured
using quoted market prices unadjusted from an inactive market; and
Level 3 \u2013 financial assets and liabilities measured using valuation techniques which use unobservable market inputs.
All valuations are carried out within the Finance function and valuation methodologies are validated by the independent Risk function within the
Group. Readers of these financial statements are advised to use caution when using the data in the following tables to evaluate the Group\u2019s
financial position or to make comparisons with other institutions. Fair value information is not provided for items that do not meet the definition
of\u00a0a\u00a0financial instrument.
Methodologies used for the calculation of fair value
The methods used for calculation of fair value in 2024 are as follows:
Financial instruments measured at fair value in the financial statements
(i) Trading portfolio financial instruments
The fair value of trading debt securities, together with quoted equity shares is based on quoted prices or bid/offer quotations sourced from external
securities dealers, where these are available on an active market. Where securities and equities are traded on an exchange, the fair value is based
on prices from the exchange.
(ii) Derivative financial instruments
Where derivatives are traded on an exchange, the fair value is based on prices from the exchange. The fair value of over-the-counter derivative
financial instruments is estimated based on standard market discounting and valuation methodologies which use reliable observable inputs
including yield curves and market rates. These methodologies are implemented by the Finance function and validated by the Risk function. Where
there is uncertainty around the inputs to a derivative\u2019s valuation model, the fair value is estimated using inputs which provide the Group\u2019s view of
the most likely outcome in a disposal transaction between willing counterparties in a functioning market. Where an unobservable input is material
to the outcome of the valuation, a range of potential outcomes from favourable to unfavourable is estimated.
Counterparty valuation adjustment ('CVA') and Funding valuation adjustment ('FVA') are applied to all uncollateralised over-the-counter derivatives.
The combination of CVA and FVA is referred to as XVA.
CVA is calculated as: Expected positive exposure ('EPE') multiplied by probability of default ('PD') multiplied by loss given default ('LGD').
EPE\u00a0profiles are generated at a counterparty netting set through simulation. PDs are derived from market based credit default swaps ('CDS')
information. As most counterparties do not have a quoted CDS, PDs are derived by mapping each counterparty to an index CDS credit grade.
LGDs are based on the specific circumstances of the counterparty and take into account valuation of offsetting security, where applicable. For
smaller exposures where security valuations are not individually assessed, an LGD of 60% is applied (2023: 60%).
FVA is calculated as: Expected exposure ('EE') multiplied by funding spread ('FS') multiplied by counterpart survival probability (1-PD). EE profiles
(net of expected positive and negative exposures) are generated at a counterparty netting set through simulation. Funding spreads used are an
average implied by CDSs for the Group\u2019s most active external derivative counterparties. The rationale in applying these spreads is to best estimate
the FVA which a counterparty would apply in a transaction to close out the Group\u2019s existing positions.
Where XVA valuation adjustments have been applied to a derivative instrument, the entire instrument is classified as Level 3 in the fair value
hierarchy where a not insignificant component of the XVA valuation is derived from unobservable inputs.
Within t he range of estimates and fair value sensitivity measurements, a favourable and an adverse scenario have been selected for PDs and
LGDs for CVA. The favourable/adverse scenario for customer PDs are (i) a single rating upgrade and (ii) a single rating downgrade, respectively.
Customer LGDs are shifted according to estimates of improvement in value of security compared with potential derivatives market values. Within
the combination of LGD and PD, both are shifted together yielding positive and negative valuations which are disclosed as potential alternative
valuations. See 'Significant unobservable inputs' within this note. For FVA, an adverse scenario is the use of the bond yields of the Group\u2019s most
active derivative counterparties while a favourable scenario is an upgrade in the CDS of the reference entities used to derive funding spreads.
43\u00a0 Fair value of financial instruments continued
(iii) Investment securities
The fair value of investment securities has been estimated based on expected sale proceeds. The expected sale proceeds are based on bid prices
which have been analysed and compared across multiple sources for reliability. Where bid prices are unavailable, fair values are estimated by
valuation techniques using observable market data for similar instruments. Where there is no market data for a directly comparable instrument,
management judgement on an appropriate credit spread to similar or related instruments with market data available is used within the valuation
technique. This is supported by cross referencing other similar or related instruments.
(iv) Loans and advances to customers
The Group provides lending facilities of varying rates and maturities to corporate and personal customers. Valuation techniques are used in
estimating the fair value of loans, primarily using discounted cash flows and applying market rates where practicable and taking credit risk into account.
The majority of loans and advances to customers are held at amortised cost, however, the Group has a small number of loans and advances which are
required to be measured at FVTPL having failed the SPPI test. The valuation techniques used apply equally to those held at FVTPL and those
held at amortised cost.
A key assumption for determining the fair value of loans and advances is that the carrying amount of variable rate loans (excluding mortgage
products) approximates to market value. For fixed rate loans, the fair value is calculated by discounting expected cash flows using discount rates
that reflect the interest rate risk in that portfolio.
The fair value of mortgage products, including tracker mortgages, is calculated by discounting expected cash flows using discount rates that reflect
the interest rate/credit risk in the portfolio.
(v) Virtual corporate power purchase agreement
The fair value of the virtual corporate power purchase agreement is estimated using discounted cash flows applying market rates when available
and rates offered by other data providers, in particular for forward Irish electricity solar pricing curves.
Financial instruments not measured at fair value but with fair value information presented separately in the notes to the
financial\u00a0statements
(i) Loans and advances to banks
The fair value of loans and advances to banks is estimated using discounted cash flows applying either market rates, where practicable, or rates
currently offered by other financial institutions for placings with similar characteristics.
(ii) Loans and advances to customers at amortised cost
See methodology above under the heading \u2018Loans and advances to customers\u2019.
(iii) Securities financing
The fair value of securities financing assets and liabilities approximate their carrying amount as these balances are generally short-dated and
fully\u00a0collateralised.
(iv) Deposits by central banks and banks and customer accounts
The fair value of current accounts and deposit liabilities which are repayable on demand, or which re-price frequently, approximates to their
book\u00a0value. The fair value of all other deposits and other borrowings is estimated using discounted cash flows and applying applicable market
rates as appropriate.
(v) Subordinated liabilities and debt securities in issue
The estimated fair value of subordinated liabilities and other capital instruments and debt securities in issue, is based on quoted prices where
available, or where these are unavailable, are estimated using valuation techniques using observable market data for similar instruments.
Where\u00a0there is no market data for a directly comparable instrument, management judgement, on an appropriate credit spread to similar or
related\u00a0instruments with market data available, is used within the valuation technique. This is supported by cross-referencing other similar or
related\u00a0instruments.
(vi) Other financial assets and other financial liabilities
This caption includes accrued interest receivable and payable and other receivables (including amounts awaiting settlement and accounts
payable). The carrying amount is considered representative of fair value.
(vii) Commitments pertaining to credit-related instruments
Details of the various credit-related commitments and other off-balance sheet financial guarantees entered into by the Group are included in
note\u00a039. The ECL is considered a reasonable approximation of fair value of these credit-related financial instruments.
43\u00a0 Fair value of financial instruments continued
The table below sets out the carrying amount and fair value of financial instruments across the three levels of the fair value hierarchy at
31\u00a0December 2024 and 2023:
2024
2023
Carrying
amount
Fair Value
Carrying
amount
Fair Value
Fair value hierarchy
Fair value hierarchy
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Financial assets measured at fair value
Trading portfolio financial assets
136
136
\u2014
\u2014
136
93
93
\u2014
\u2014
93
Derivative financial instruments:
Interest rate derivatives1
2,109
\u2014
2,020
89
2,109
2,351
\u2014
2,234
117
2,351
Exchange rate derivatives
35
\u2014
35
\u2014
35
14
\u2014
14
\u2014
14
Forward contract to acquire loans2
\u2014
\u2014
\u2014
\u2014
\u2014
12
\u2014
\u2014
12
12
Loans and advances to customers at FVTPL
64
\u2014
\u2014
64
64
42
\u2014
\u2014
42
42
Investment debt securities at FVOCI
13,568
13,468
100
\u2014
13,568
12,488
12,411
77
\u2014
12,488
Equity investments at FVTPL
297
1
\u2014
296
297
355
15
\u2014
340
355
16,209
13,605
2,155
449
16,209
15,355
12,519
2,325
511
15,355
Financial assets not measured at fair value
Cash and balances at central banks
37,315
664
3
36,651
\u2014
37,315
38,018
598
3
37,420
\u2014
38,018
Loans and advances to banks
1,321
\u2014
241
1,080
1,321
1,329
\u2014
259
1,070
1,329
Loans and advances to customers:
Mortgages4
36,722
\u2014
\u2014
35,832
35,832
34,472
\u2014
\u2014
33,459
33,459
Non-mortgages
33,103
\u2014
\u2014
33,043
33,043
30,977
\u2014
\u2014
30,909
30,909
Securities financing
6,643
\u2014
\u2014
6,643
6,643
6,466
\u2014
\u2014
6,466
6,466
Investment debt securities measured at
amortised\u00a0cost
4,803
2,633
\u2014
2,168
4,801
4,510
\u2014
2,566
\u2014
1,971
4,537
Other financial assets
894
\u2014
\u2014
894
894
688
\u2014
\u2014
688
688
120,801
3,297
36,892
79,660
119,849
116,460
3,164
37,679
74,563
115,406
Financial liabilities measured at fair value
Trading portfolio financial liabilities
262
262
\u2014
\u2014
262
139
139
\u2014
\u2014
139
Derivative financial instruments:
Interest rate derivatives1
1,689
\u2014
1,391
298
1,689
1,869
\u2014
1,563
306
1,869
Exchange rate derivatives
112
\u2014
112
\u2014
112
29
\u2014
28
1
29
Equity derivatives
\u2014
\u2014
\u2014
\u2014
\u2014
1
\u2014
1
\u2014
1
Credit derivatives
3
\u2014
3
\u2014
3
3
\u2014
3
\u2014
3
Virtual corporate power purchase agreement
3
\u2014
\u2014
3
3
\u2014
\u2014
\u2014
\u2014
\u2014
2,069
262
1,506
301
2,069
2,041
139
1,595
307
2,041
Financial liabilities not measured at fair value
Deposits by central banks and banks
836
\u2014
6
830
836
1,780
\u2014
740
1,040
1,780
Customer accounts:
Current accounts
62,657
\u2014
\u2014
62,657
62,657
62,928
\u2014
\u2014
62,928
62,928
Demand deposits
31,126
\u2014
\u2014
31,126
31,126
32,083
\u2014
\u2014
32,083
32,083
Time deposits
16,100
\u2014
\u2014
16,150
16,150
9,771
\u2014
\u2014
9,755
9,755
Securities financing
196
\u2014
\u2014
196
196
575
\u2014
\u2014
575
575
Debt securities in issue
8,832
8,074
\u2014
957
9,031
8,423
8,573
\u2014
28
8,601
Subordinated liabilities and other capital
instruments
1,627
1,662
\u2014
\u2014
1,662
1,473
1,497
\u2014
13
1,510
Other financial liabilities5
1,792
\u2014
\u2014
1,792
1,792
1,571
\u2014
\u2014
1,571
1,571
Loan commitments and other credit related
commitments
44
\u2014
\u2014
44
44
43
\u2014
\u2014
43
43
Financial guarantees
13
\u2014
\u2014
13
13
16
\u2014
\u2014
16
16
123,223
9,736
6
113,765
123,507
118,663
10,070
740
108,052
118,862
1. Includes \u20ac 43 million (2023: \u20ac 84 million) derivative assets and \u20ac 257 million (2023: \u20ac 262 million) derivative liabilities categorised as level 3 where a not insignificant
component of the XVA valuation is derived from unobservable inputs.
2. Relates to the forward contract to acquire Ulster Bank tracker (and linked) mortgages. See \u2018Ulster Bank forward contract \u2013 tracker (and linked) mortgages\u2019 below for
further information.
3. Comprises cash on hand.
4. Includes residential and commercial mortgages.
5. Includes \u20ac 64 million of fair value changes of hedged items in portfolio hedges of interest rate risk.\u00a0
43\u00a0 Fair value of financial instruments continued
Significant transfers between Level 1 and Level 2 of the fair value hierarchy
There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy for the years ended 31 December 2024 and\u00a02023.
Reconciliation of balances in Level 3 of the fair value hierarchy
The following table shows (i) a reconciliation from the opening balances to the closing balances for fair value measurements in Level 3 of the
fair\u00a0value hierarchy and (ii) total unrealised gains or losses included in profit or loss that is attributable to the assets and liabilities categorised
as\u00a0Level 3 in the fair value hierarchy at the end of the year.
2024
Financial assets
Financial liabilities
Derivatives
Loans
and
advances
at FVTPL
Equities
at FVTPL
Total
Derivatives
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2024
129
42
340
511
307
307
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 losses
(40)
\u2014
\u2014
(40)
(6)
(6)
Net change in FVTPL
\u2014
11
76
87
\u2014
\u2014
(40)
11
76
47
(6)
(6)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
26
46
72
\u2014
\u2014
Sales/disposals/redemptions
\u2014
\u2014
(166)
(166)
\u2014
\u2014
Cash received:
Principal
\u2014
(15)
\u2014
(15)
\u2014
\u2014
At 31 December 2024
89
64
296
449
301
301
Total unrealised gains or (losses) included in profit or loss for
assets and liabilities classified as level 3 at the end of the year
Net trading income \u2013 losses
(15)
\u2014
\u2014
(15)
(35)
(35)
Gains on equity investments at FVTPL
\u2014
\u2014
35
35
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(3)
\u2014
(3)
\u2014
\u2014
(15)
(3)
35
17
(35)
(35)
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Reconciliation of balances in Level 3 of the fair value hierarchy
2023
Financial assets
Financial liabilities
Derivative
s
Loans and
advances
at FVTPL
Equities at
FVTPL
Total
Derivative
s
Total
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
\u20ac m
Movement in level 3 assets and liabilities
At 1 January 2023
88
249
284
621
432
432
Transfers into/out of level 31
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total gains or (losses) in:
Profit or loss:
Net trading income \u2013 gains/(losses)
41
\u2014
\u2014
41
(125)
(125)
Net change in FVTPL
\u2014
3
30
33
\u2014
\u2014
41
3
30
74
(125)
(125)
Other comprehensive income:
Net change in fair value of investment securities
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net change in fair value of cash flow hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Purchases/additions
\u2014
20
35
55
\u2014
\u2014
Sales/disposals
\u2014
(135)
(9)
(144)
\u2014
\u2014
Cash received:
Principal
\u2014
(95)
\u2014
(95)
\u2014
\u2014
At 31 December 2023
129
42
340
511
307
307
Total unrealised gains or losses included in profit or loss for
assets\u00a0and liabilities classified as level 3 at the end of the year
Net trading income \u2013 gains
71
\u2014
\u2014
71
76
76
Gains on equity investments at FVTPL
\u2014
\u2014
27
27
\u2014
\u2014
Losses on loans and advances at FVTPL
\u2014
(15)
\u2014
(15)
\u2014
\u2014
71
(15)
27
83
76
76
1. Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.
43\u00a0 Fair value of financial instruments continued
Significant unobservable inputs
The table below sets out information about significant unobservable inputs used in measuring financial instruments categorised as Level 3 in the
fair value hierarchy:
Fair value
Range of estimates
Financial instrument
2024
\u20ac m
2023
\u20ac m
Valuation
technique
Significant
unobservable input
31 December
2024
31 December
2023
Uncollateralised customer
derivatives
Asset
89
117
CVA
LGD
38% - 56%
41% - 59%
Liability
298
307
(Base 46%)
(Base 49%)
PD
0.4% - 1.8%
0.4% - 1.9%
(Base 0.8% 1-year PD)
(Base 0.9% 1-year PD)
FVA
Funding spreads
(0.2%) - 0.3%
(0.1%) - 0.3%
Forward contract to acquire
loans
Asset
\u2014
12
Discounted
Expected Future
Cash flows
PD
n/a
(0.25%) - 0.25%
Discount Yield
n/a
(0.1%) - 0.1%
Virtual corporate power
purchase agreement
Liability
3
\u2014
Discounted
Expected Future
Cash flows
Irish electricity prices
(10%) - 20%
n/a
Visa Inc. Series B Preferred
Stock1
Asset
16
41
Quoted market
price (to which a
discount has been
applied)
Final conversion rate
0% - 90%
0% - 90%
1. Sensitivity information has not been provided for other equity investments as the portfolio comprises several investments, none of which is individually material.
Uncollateralised customer derivatives
Derivatives (assets and liabilities) include negative XVA valuation adjustments amounting to net \u20ac 8 million (2023: \u20ac\u00a012\u00a0million). The sensitivity to
unobservable inputs for this XVA valuation adjustment at 31 December 2024 ranges from (i) negative \u20ac\u00a05 million to positive \u20ac 3 million for CVA
(2023: negative \u20ac 9 million to positive \u20ac 4 million) and (ii) negative \u20ac 1 million to positive \u20ac\u00a01\u00a0million for FVA (2023: negative \u20ac 2 million to positive
\u20ac\u00a01 million).
A number of derivatives are subject to valuation methodologies which use unobservable inputs. As the variability of the valuation is not greater
than \u20ac 1 million in any individual case or collectively, the detail is not disclosed here.
Forward contract to acquire loans
In 2023, the Group recognised a forward contract to acquire Ulster Bank tracker (and linked) mortgages. The transfer of the loans completed in
September 2024.\u00a0 At 31 December 2023 the fair value sensitivity to unobservable inputs ranged from negative \u20ac 4.8 million to positive \u20ac 5.4 million
for PDs and negative \u20ac 3.2 million to positive \u20ac 3.2 million for discount yield.
Virtual corporate power purchase agreement
During 2024 the Group entered into a virtual corporate power purchase agreement with NTR to construct two solar farms in Co. Wexford to supply
electricity to the Group. This agreement meets the definition of a derivative and had a negative fair value of \u20ac 3 million at 31 December 2024 (31
December 2023: Nil). Its valuation is subject to valuation methodologies which use unobservable inputs. The most significant unobservable input is
forward Irish electricity solar capture prices. The fair value sensitivity to this input ranges from negative \u20ac 4 million to positive \u20ac 2 million
(31\u00a0December 2023: Nil).
43\u00a0 Fair value of financial instruments continued
Visa Inc. Series B Preferred Stock
In June 2016, the Group received Series B Preferred Stock in Visa Inc. with a fair value of \u20ac 65 million as part consideration for its holding of
shares in Visa Europe. The preferred stock will be convertible into Class A Common Stock of Visa Inc. over time, with partial conversions having
occurred in 2020, 2022 and 2024. The remaining conversion is subject to certain Visa Europe litigation risks that may affect the ultimate
conversion rate. In addition, the stock, being denominated in US Dollars, is subject to foreign exchange risk.
\u2013\u00a0 Valuation technique: Quoted market price of Visa Inc. Class A Common Stock to which a discount has been applied for the illiquidity and the
conversion rate variability of the preferred stock of Visa Inc. 62% haircut (2023: 56%). This was converted at the year end exchange rate.
\u2013\u00a0 Unobservable input: Final conversion rate of Visa Inc. Series B Preferred Stock into Visa Inc. Class A Common Stock.
\u2013\u00a0 Range of estimates: Estimates range from (a) no discount for conversion rate variability with a discount for illiquidity only; to (b) 90% discount
for conversion rate variability.
The fair value measurement sensitivity to unobservable discount rates ranges from negative \u20ac 16 million to positive \u20ac 21 million at 31 December
2024 (2023: negative \u20ac 31 million to positive of \u20ac 23 million).
Loans and advances to customers measured at FVTPL
For loans and advances to customers measured at FVTPL of \u20ac 64 million (2023: \u20ac 42 million), categorised within Level 3 of the fair value hierarchy
in 2024 and 2023, the Group does not believe that a reasonably possible change to alternative assumptions would change fair value significantly
and therefore has not disclosed those amounts in the table above or provided the related disclosures.\u00a0
Fair value is applied in respect of secondary facilities arising on restructured loans subject to forbearance measures, on the likelihood that additional
cash flows, in excess of their primary facilitates, will be received from customers. Given the significant uncertainty with regard to such cash flows,
the Group does not attribute a fair value unless it is reasonably certain that this value will be realised.
Day 1 gain or loss
No difference existed between the fair value at initial recognition of financial instruments and the amount that was determined at that date using a
valuation technique incorporating significant unobservable data.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-663": { "value": "
44\u00a0 Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents comprise the following balances with less than three months maturity
from the date of acquisition:
2024
2023
\u20ac m
\u20ac m
Cash and balances at central banks
37,315
38,018
Loans and advances to banks1
1,012
1,023
Total cash and cash equivalents
38,327
39,041
Additional information:
Restricted cash held to meet certain requirements under the Asset Covered Securities Act 2001
121
80
Restricted cash held in trust in respect of certain payables (note 32)
6
5
Restricted cash held to meet certain requirements arising from the Group\u2019s issuance of credit linked notes
98
\u2014
1. Included in \u2018Loans and advances to banks\u2019 total of \u20ac 1,321 million (2023: \u20ac 1,329 million) set out in note 17.
Cash and balances at central banks (net of ECL allowance of Nil) comprises:
2024
2023
\u20ac m
\u20ac m
Central Bank of Ireland
31,526
33,282
Bank of England
4,931
3,869
Federal Reserve Bank of New York
194
269
Other (cash on hand)
664
598
Total cash and balances at central banks
37,315
38,018
There are certain regulatory restrictions on the ability of subsidiaries to transfer funds to the parent company in the form of cash dividends, loans or
advances. The impact of such restrictions is not expected to have a material effect on the Group\u2019s ability to meet its cash obligations.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-664": { "value": "
45\u00a0 Statement of cash flows
Non-cash and other items included in profit before taxation
Non-cash items
2024
2023
\u20ac m
\u20ac m
Profit on disposal of property
\u2014
(2)
Loss on disposal of business
2
26
Net (gain)/loss on derecognition of financial assets measured at amortised cost
(2)
9
Dividends received from equity investments
(1)
(2)
Investments accounted for using the equity method
(26)
(12)
Net credit impairment charge
87
199
Change in other provisions
56
68
Retirement benefits \u2013 defined benefit expense
3
5
Depreciation, amortisation and impairment
301
295
Interest on subordinated liabilities and other capital instruments
55
42
Interest on debt securities1
352
274
Interest on commercial paper
22
\u2014
Loss on disposal of investment securities
77
22
Gain on termination of hedging swaps
(41)
(14)
Amortisation of premiums and discounts
22
35
Net gain on equity investments at FVTPL
(70)
(27)
Net loss on loans and advances to customers at FVTPL
3
14
Change in prepayments and accrued income
23
(115)
Change in accruals and deferred income
101
162
Effect of exchange translation and other adjustments2
82
27
Total non-cash items
1,046
1,006
Contributions to defined benefit pension schemes
(24)
(24)
Dividends received on equity investments
1
2
Total other items
(23)
(22)
Non-cash and other items for the year ended 31 December
1,023
984
Change in operating assets2
2024
2023
\u20ac m
\u20ac m
Change in trading portfolio financial assets
(43)
(85)
Change in net derivative financial instruments
49
(32)
Change in loans and advances to banks
12
26
Change in loans and advances to customers
(4,034)
(6,023)
Change in securities financing
(137)
(213)
Change in other assets
(23)
36
(4,176)
(6,291)
Change in operating liabilities2
2024
2023
\u20ac m
\u20ac m
Change in deposits by central banks and banks
(988)
1,260
Change in customer accounts
4,558
2,276
Change in securities financing
(406)
(306)
Change in trading portfolio liabilities
123
135
Change in debt securities in issue
777
(1,000)
Change in notes in circulation
(1)
(6)
Change in other liabilities
(125)
(213)
3,938
2,146
1. Relates to debt securities classified at origination as MREL.
2. The impact of foreign exchange translation for each line of the statement of financial position is removed in order to show the underlying cash impact.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-666": { "value": "
46\u00a0 Related party transactions\u00a0
Related parties in the Group include the parent company, AIB Group plc, subsidiary undertakings, associated undertakings, joint arrangements,
post-employment benefits, Key Management Personnel and connected parties. The Irish Government is also considered a related party by
virtue\u00a0of its significant influence over the Group. The immediate holding company and controlling party is AIB Group plc with its registered office
at\u00a010 Molesworth Street, Dublin 2.
(a) Transactions with subsidiary undertakings
AIB Group plc is the ultimate parent company of the Group. Banking transactions between the parent company and its subsidiaries and between
subsidiaries are entered into in the normal course of business. These include loans, deposits, provision of derivative contracts, foreign currency
contracts and the provision of guarantees on an \u2018arm\u2019s length basis\u2019. Furthermore, pricing arrangements between Allied Irish Banks, p.l.c. and
certain Irish subsidiaries, and between certain Irish subsidiaries reflect revised OECD guidelines on transfer pricing, which are the internationally
accepted principles in this area, and take account of the functions, risks and assets involved. In accordance with IFRS 10 transactions between the
parent company and its subsidiaries and between subsidiaries have been eliminated on consolidation.
(b) Associated undertakings and joint ventures
From time to time, the Group provides certain banking and financial services for associated undertakings. These transactions are made in the
ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of collectability or present other unfavourable features. Details of
loans to associates and joint venture are set out in notes 18 and 29 to the consolidated financial statements.
(c) Provision of banking and related services and funding to Group Pension schemes
The Group provides certain banking and financial services including money transmission services for the AIB Group Pension schemes. Such
services are provided in the ordinary course of business, on substantially the same terms, including interest rates, as those prevailing at the time
for comparable transactions with other persons.
During 2013, the Group established a pension funding partnership, AIB\u2008PFP Scottish Limited Partnership ('SLP') in the UK. Following this,
a\u00a0subsidiary of Allied Irish Banks, p.l.c. transferred loans to the SLP for the purpose of ring-fencing the repayments of these loans to fund future
deficit payments of the AIB UK Defined Benefit Pension Scheme. The ring-fenced loans were removed from the arrangement in 2023 (note 41).
During 2012, the Group agreed to make certain contributions to the pension scheme which were settled through the transfer to the AIB Group
Irish\u00a0Pension Scheme of interests in a special purpose entity owning loans and advances previously transferred at fair value from the Group.
A\u00a0subsidiary of the Group was appointed as a service provider for the loans and advances transferred in return for a servicing fee at a market rate
(note 41).
46\u00a0 Related party transactions continued
(d) Companies Act 2014 disclosures
(i) Loans to Directors
The following information is presented in accordance with the Companies Act 2014. For the purposes of the Companies Act disclosures,
any\u00a0Director means a current Member of the Board of Directors and individual who was a Director during the relevant period.
Where no amount is shown in the tables below, this indicates either a credit balance, a balance of Nil, or a balance of less than \u20ac 500. 'Balances'
and \u2018repayments\u2019 include principal and interest.
Details of transactions with Directors for the year ended 31 December 2024 and 31 December 2023 are as follows:
2024
2023
Balance at
1 January
2024
Amounts
advanced
during
2024
Amounts
repaid
during
2024
Balance at
31 December
2024
Balance at
1 January
2023
Amounts
advanced
during
2023
Amounts
repaid
during
2023
Balance at
31 December
2023
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Tanya Horgan
Loans
43
\u2014
(2)
41
47
\u2014
(4)
43
Overdraft/credit card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
43
\u2014
(2)
41
47
\u2014
(4)
43
Interest charged during the year
3
3
Maximum debit balance during the year2
43
47
Colin Hunt
Loans
597
\u2014
(47)
550
642
\u2014
(45)
597
Overdraft/credit card1
15
\u2014
\u2014
16
16
\u2014
\u2014
15
Total
612
\u2014
(47)
566
658
\u2014
(45)
612
Interest charged during the year
15
17
Maximum debit balance during the year2
620
666
Ann O\u2019 Brien
Loans
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Overdraft/Credit Card1
\u2014
\u2014
\u2014
1
\u2014
\u2014
\u2014
\u2014
Total
\u2014
\u2014
\u2014
1
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
\u2014
\u2014
Maximum debit balance during the year2
2
\u2014
Helen Normoyle
Loans
\u2014
264
(264)
\u2014
\u2014
\u2014
\u2014
\u2014
Overdraft/Credit Card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
\u2014
264
(264)
\u2014
0
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
2
\u2014
Maximum debit balance during the year2
267
\u2014
Basil Geoghegan
Loans
\u2014
663
(37)
627
\u2014
\u2014
\u2014
\u2014
Overdraft/credit card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
\u2014
663
(37)
627
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
13
\u2014
Maximum debit balance during the year2
669
\u2014
1. Amounts advanced and repaid are not shown for overdraft/credit card facilities as these are revolving in nature (i.e. they may be drawn, repaid and redrawn up to
their limit over the course of the year).
2. The maximum debit balance is calculated by aggregating the maximum debit balance drawn on each facility during the year.
46\u00a0 Related party transactions continued
(d) Companies Act 2014 disclosures continued
(i) Loans to Directors continued
Helen Normoyle held an overdraft facility which was not used during the year. Ann O\u2019Brien held a credit card facility\u00a0with the Group which had an
opening and closing balance of less than \u20ac1,000 at the beginning and end of the reporting period. However, the maximum debit balance exceeded
\u20ac 1,000 in the period, and has been reported in the preceding table. Anik Chaumartin, Donal Galvin, Sandy Kinney Pritchard, Andy Maguire, Elaine
MacLean, Brendan McDonagh, Jim Pettigrew, Jan Sijbrand, Fergal O\u2019Dwyer and Raj Singh had no credit facilities with the Group in 2024.
All facilities are performing to their terms and conditions. All loans to Directors and their connected persons are made in the ordinary course of
business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for similar transactions with other
persons unconnected with the Group and of similar financial standing and do not involve more than normal risk of collectability.
An expected credit loss allowance is held for all loans and advances. Accordingly, a total expected credit loss allowance of under \u20ac 500 was held
on the above facilities at 31 December 2024 (2023: under \u20ac 500).
(ii) Connected persons
The aggregate of loans to connected persons of Directors in office during the year ended 31 December 2024 and 2023 are set out in the table below.
Loans to connected persons of Directors in office during the year have not been disclosed if their balance did not exceed \u20ac 7,500 in the year.\u00a0
2024
2023
Balance at
31 December
2024
Maximum
amount
outstanding
during the
year
Number of
persons at
31 December
2024
Maximum
number of
persons
during the
year
Balance at
31 December
2023
Maximum
amount
outstanding
during the
year
Number of
persons at\u00a0
31 December
2023
Maximum
number of
persons
during the
year
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Tanya Horgan
407
428
2
4
426
445
3
4
Brendan McDonagh
9
11
1
1
9
9
1
1
Helen Normoyle
48
53
2
3
52
57
3
3
Ann O\u2019Brien
68
73
1
1
73
161
1
1
Fergal O\u2019Dwyer1
1
27
1
3
25
245
3
3
Basil Geoghegan
1
9
2
2
\u2014
\u2014
\u2014
\u2014
Andy Maguire
23
25
1
1
\u2014
\u2014
\u2014
\u2014
Donal Galvin
140
165
1
1
\u2014
\u2014
\u2014
\u2014
1. As at 31 December 2024, a guarantee entered into by a connected person of Fergal O\u2019Dwyer in favour of the Group amounted to \u20ac20,000. No amounts were paid or
liability incurred in fulfilling the guarantee.
An expected credit loss allowance is held for all loans and advances. Accordingly, a total expected credit loss allowance of less than \u20ac 20,000 was
held on the above facilities at 31 December 2024 (2023: less than \u20ac 1,000).
The value of arrangements at the beginning and end of the financial year as stated above in accordance with Section 307 of the Companies Act
2014, expressed as a percentage of the net assets of the Group at the beginning and end of the financial year, is less than 1%.
(e) IAS 24 Related Party Disclosures
The following disclosures are made in accordance with the provisions of IAS 24 Related Party Disclosures (\u2018IAS 24\u2019). Under IAS 24,
Key\u00a0Management Personnel (\u2018KMP\u2019) are defined as comprising Executive and Non-Executive Directors together with Senior Executive Officers,
namely, the members of the Executive Committee. As at 31 December 2024, the Group had 27 KMP (2023: 25 KMP).
(i) Transactions with Key Management Personnel
Loans to KMP and their close family members (\u2018CFM\u2019) are made in the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable transactions with other persons of similar standing not connected with
the Group, and do not involve more than the normal risk of collectability or present other unfavourable features. Loans to Directors and Senior
Executive Officers are made on terms available to other employees in the Group generally, in accordance with established policy, within limits
set\u00a0on a case-by-case basis.
2024
2023
Balance at
1\u00a0January
2024
Balance at
31 December
2024
Total
number of
relevant
KMP/CFM at
1 January
2024
Total number
of relevant
KMP/CFM at
31 December
2024
Balance at
1 January
2023
Balance at
31 December
2023
Total
number of
relevant
KMP/CFM\u00a0 at
1 January
2023
Total number
of relevant
KMP/CFM at
31 December
2023
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Loans
1,975
2,281
13
15
1,563
1,975
13
13
Deposits
2,084
2,211
29
33
2,048
2,084
32
29
Total commitments outstanding refers to the total of any undrawn amounts on credit cards and/or overdraft facilities provided to KMP and their
CFM. Total commitments outstanding as at 31 December 2024 were \u20ac 0.09 million (2023: \u20ac 0.12 million). An expected credit loss allowance is held
for all loans\u00a0and advances. Accordingly, a total expected credit loss allowance of less than \u20ac 1,000 was held on the above facilities at 31 December
2024 (2023: \u20ac 1,000).
46\u00a0 Related party transactions continued
(e) IAS 24 Related Party Disclosures continued
(ii) Compensation of Key Management Personnel
Details of compensation paid to KMP are provided below. The figures shown include the figures separately reported in respect of Directors\u2019
remuneration on pages 163 and 165.
2024
2023
\u20ac m
\u20ac m
Short term benefits (salaries, fees and other short-term benefits)
8.4
7.5
Post-employment benefits1
1.1
1.0
Termination benefits
\u2014
0.4
Total compensation of key management personnel
9.5
8.9
1. Comprises payments to defined benefit or defined contribution pension schemes, in accordance with actuarial advice, to provide post-retirement pensions. The Group\u2019s
defined benefit pension schemes closed to future accrual with effect from 31 December 2013 and all employee pension benefits have accrued on the basis of defined
contributions since that date.
(f) Summary of relationship with the Irish Government
The Irish Government is recognised as a related party under IAS 24 as it is in a position to exercise significant influence over the Group.
Relationship Framework
In order to comply with contractual commitments imposed on the Group in connection with its recapitalisation by the Irish State and with the
requirements of EU state aid applicable in respect of that recapitalisation, a Relationship Framework was entered into between the Minister and the
Group in March 2012. This provides the framework under which the relationship between the Minister and the Group is governed. The Relationship
Framework was amended and restated on 12 June 2017. Furthermore, the AIB Group plc Relationship Framework was put in place on 8 December
2017 in substitution for the Relationship Framework dated 12 June 2017. Under the relationship framework, the authority and responsibility for strategy
and commercial policies (including business plans and budgets) and conducting the Group\u2019s day-to-day operations rest with the Board and the Group\u2019s
management team, however the Group remains subject to certain obligations which require advance consultation with or approval by the State.
These obligations relate to, inter alia:
\u2013 The composition of the board;
\u2013 Declaration and payment of dividends;
\u2013 Restrictions on various types of remuneration;
\u2013 Buy-backs or redemptions by the Group of its shares; and
\u2013 Material acquisitions/disposals.
The relationship of the Irish Government with the Group is outlined under the following headings:
\u2013 Ordinary shares
At 31 December 2024, the State\u2019s shareholding in the Company has reduced to 442,373,123 ordinary shares (18.99%) following a directed
share buyback, the sell down of shares, the placing of shares, and disposals as part of a pre-arranged trading plan. At 31 December 2023,
the\u00a0State held 1,067,638,190 ordinary shares (40.77%).
\u2013 Issue of warrants to the Minister for Finance
In 2017, the Group issued warrants to the Minister to subscribe for 271,166,685 ordinary shares. Following the reduction in issued share capital
during the year, these warrants equate to 11.65% of the issued share capital at 31 December 2024. For further details see note 35.
\u2013 Guarantee schemes
European Communities (Deposit Guarantee Scheme) Regulations 2015
Eligible deposits (including credit balances in current accounts, demand deposit accounts and term deposit accounts) of up to \u20ac\u00a0100,000 per
depositor per credit institution are covered under this scheme. The scheme is administered by the CBI and is funded by the credit institutions
covered by the scheme.
Strategic Banking Corporation of Ireland Scheme
The Group through its participation in the Strategic Banking Corporation of Ireland (\u2018SBCI\u2019) Support loan Schemes (the \u2018Schemes\u2019) benefits from
a\u00a0Government guarantee against losses on qualifying finance agreements on amounts advanced under the Schemes. At 31 December 2024,
\u20ac\u00a0481\u00a0million (2023: \u20ac\u00a0548 million) is outstanding across individual schemes of which the Future Growth Loan Scheme; Brexit/COVID-19 Working
Capital Loan Schemes, Growth & Sustainability Loan Schemes, Covid-19 and Ukraine Credit Guarantee Scheme benefit from up to 80%
Government guarantee.
Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009
The Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 was one of various stabilisation measures implemented by the State to support the
Irish banking system including the Group. The Group no longer has any guaranteed liabilities under the scheme however, certain of the covenants in the
scheme continue to apply to the Group including reporting covenants, until the scheme is terminated by the Minister for Finance.
46\u00a0 Related party transactions continued
(f) Summary of relationship with the Irish Government continued
\u2013 NAMA
The Group has provided NAMA with a series of indemnities relating to transferred assets. Any indemnity payment would result in an outflow of
economic benefit for the Group.
The General Scheme of the Conclusion of IBRC Special Liquidation and Dissolution of NAMA Bill 2024 (the Bill) was approved by Government
on 2 July 2024 and has not been enacted to date. Its purpose is to effect the conclusion of the IBRC Special Liquidation and the dissolution of
NAMA. It also makes provision for the implementation of appropriate arrangements to manage any remaining residual activity of IBRC and
NAMA following the conclusion of their work mandates, including through the creation of a new Resolution Unit within the National Treasury
Management Agency (NTMA) to manage any remaining residual activity.
\u2013 Irish bank levy
The bank levy was calculated based on each financial institution\u2019s deposits at December 2022 which were either covered under the Deposit
Guarantee Scheme or were not so covered but had preferential status under Article 108 of the BRRD. The annual levy paid by the Group for
2024 and reflected in operating expenses (note 10) in the income statement amounted to \u20ac 94 million (2023: \u20ac 37 million). In 2023 the bank levy
was calculated based on each financial institution\u2019s Deposit Interest Retention Tax (\u2018DIRT\u2019) payment in a base year with 2019 being the base
year for 2023.
\u2013 Other transactions with the Irish Government and entities under its control
In addition to the above matters, the Group also enters into other normal banking transactions with the Irish Government, its agencies and
entities under its control. This includes transactions with (i) Government related entities, (ii) local government and commercial semi-state bodies
and (iii) financial institutions under Irish Government control/significant influence. Other transactions include the payment of taxes, pay related
social insurance, local authority rates, and the payment of regulatory fees, as appropriate.
(i) Irish Government and related entities
The following table outlines the amounts outstanding at 31 December 2024 and 2023 with Irish Government and related entities which are
considered individually significant (excluding accrued interest). Related entities includes departments of the Irish Government located in the State
and embassies, consulates and other institutions of the Irish Government located outside the State. The Post Office Savings Bank (\u2018POSB\u2019) and
the National Treasury Management Agency (\u2018NTMA\u2019) are also included.
2024
2023
Balance
Balance
\u20ac m
\u20ac m
Assets
Cash and balances at central banks1
31,525
33,282
Trading portfolio financial assets
71
54
Investment securities2
4,088
4,356
Liabilities
Trading portfolio financial liabilities
257
134
Customer accounts
402
466
1. Cash and balances at central banks represent the placements which the Group holds with the Central Bank.
2. Investment securities at 31 December 2024 comprise \u20ac 4,088 million (2023: \u20ac 4,356 million) in Irish Government securities held in the normal course of business.
The Group has disclosed details of the share buyback and the Irish bank levy separately in these financial statements. All other banking transactions
are entered into in the ordinary course of business under normal business terms.
(ii) Local government1 and Commercial semi-state bodies2
During 2024 and 2023, the Group entered into banking transactions in the normal course of business with local government bodies and semi-state
bodies. These\u00a0transactions include the granting of loans and the acceptance of deposits, as well as derivative and clearing transactions.
1. This category includes local authorities, borough corporations, county borough councils, county councils, boards of town commissioners, urban district councils,
non\u2011commercial public sector entities, public voluntary hospitals and schools.
2. Semi-state bodies is the name given to organisations within the public sector operating with some autonomy. They include commercial organisations or companies
in\u00a0which the State is the sole or main shareholder.
46\u00a0 Related party transactions continued
(f) Summary of relationship with the Irish Government continued
(iii) Financial institutions under Irish Government control/significant influence
The Irish Government has a controlling interest in Permanent tsb plc and controls the Irish Bank Resolution Corporation Limited (In Special
Liquidation). Due to the Group\u2019s related party relationship with the Irish Government, balances between these financial institutions and the Group
are considered related party transactions in accordance with IAS 24. Transactions with these institutions are normal banking transactions entered
into in the ordinary course of cash management business under normal business terms. The transactions constitute the short-term placing and
acceptance of deposits, derivative transactions, investment debt securities and repurchase agreements.
The following balances were outstanding in total to these financial institutions at 31 December 2024 and 2023:
2024
2023
\u20ac m
\u20ac m
Assets
Trading portfolio financial assets
5
\u2014
(g) Indemnities
The Group has indemnified the Directors of Allied Irish Banks Pensions Limited and AIB DC Pensions (Ireland) Limited, the trustees of the Group\u2019s
Ireland defined benefit pension scheme and defined contribution pension scheme, respectively, against any actions, claims or demands arising out
of their actions as Directors of the trustee companies, other than by reason of wilful default.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-665": { "value": "
46\u00a0 Related party transactions\u00a0
Related parties in the Group include the parent company, AIB Group plc, subsidiary undertakings, associated undertakings, joint arrangements,
post-employment benefits, Key Management Personnel and connected parties. The Irish Government is also considered a related party by
virtue\u00a0of its significant influence over the Group. The immediate holding company and controlling party is AIB Group plc with its registered office
at\u00a010 Molesworth Street, Dublin 2.
(a) Transactions with subsidiary undertakings
AIB Group plc is the ultimate parent company of the Group. Banking transactions between the parent company and its subsidiaries and between
subsidiaries are entered into in the normal course of business. These include loans, deposits, provision of derivative contracts, foreign currency
contracts and the provision of guarantees on an \u2018arm\u2019s length basis\u2019. Furthermore, pricing arrangements between Allied Irish Banks, p.l.c. and
certain Irish subsidiaries, and between certain Irish subsidiaries reflect revised OECD guidelines on transfer pricing, which are the internationally
accepted principles in this area, and take account of the functions, risks and assets involved. In accordance with IFRS 10 transactions between the
parent company and its subsidiaries and between subsidiaries have been eliminated on consolidation.
(b) Associated undertakings and joint ventures
From time to time, the Group provides certain banking and financial services for associated undertakings. These transactions are made in the
ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of collectability or present other unfavourable features. Details of
loans to associates and joint venture are set out in notes 18 and 29 to the consolidated financial statements.
(c) Provision of banking and related services and funding to Group Pension schemes
The Group provides certain banking and financial services including money transmission services for the AIB Group Pension schemes. Such
services are provided in the ordinary course of business, on substantially the same terms, including interest rates, as those prevailing at the time
for comparable transactions with other persons.
During 2013, the Group established a pension funding partnership, AIB\u2008PFP Scottish Limited Partnership ('SLP') in the UK. Following this,
a\u00a0subsidiary of Allied Irish Banks, p.l.c. transferred loans to the SLP for the purpose of ring-fencing the repayments of these loans to fund future
deficit payments of the AIB UK Defined Benefit Pension Scheme. The ring-fenced loans were removed from the arrangement in 2023 (note 41).
During 2012, the Group agreed to make certain contributions to the pension scheme which were settled through the transfer to the AIB Group
Irish\u00a0Pension Scheme of interests in a special purpose entity owning loans and advances previously transferred at fair value from the Group.
A\u00a0subsidiary of the Group was appointed as a service provider for the loans and advances transferred in return for a servicing fee at a market rate
(note 41).
46\u00a0 Related party transactions continued
(d) Companies Act 2014 disclosures
(i) Loans to Directors
The following information is presented in accordance with the Companies Act 2014. For the purposes of the Companies Act disclosures,
any\u00a0Director means a current Member of the Board of Directors and individual who was a Director during the relevant period.
Where no amount is shown in the tables below, this indicates either a credit balance, a balance of Nil, or a balance of less than \u20ac 500. 'Balances'
and \u2018repayments\u2019 include principal and interest.
Details of transactions with Directors for the year ended 31 December 2024 and 31 December 2023 are as follows:
2024
2023
Balance at
1 January
2024
Amounts
advanced
during
2024
Amounts
repaid
during
2024
Balance at
31 December
2024
Balance at
1 January
2023
Amounts
advanced
during
2023
Amounts
repaid
during
2023
Balance at
31 December
2023
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Tanya Horgan
Loans
43
\u2014
(2)
41
47
\u2014
(4)
43
Overdraft/credit card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
43
\u2014
(2)
41
47
\u2014
(4)
43
Interest charged during the year
3
3
Maximum debit balance during the year2
43
47
Colin Hunt
Loans
597
\u2014
(47)
550
642
\u2014
(45)
597
Overdraft/credit card1
15
\u2014
\u2014
16
16
\u2014
\u2014
15
Total
612
\u2014
(47)
566
658
\u2014
(45)
612
Interest charged during the year
15
17
Maximum debit balance during the year2
620
666
Ann O\u2019 Brien
Loans
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Overdraft/Credit Card1
\u2014
\u2014
\u2014
1
\u2014
\u2014
\u2014
\u2014
Total
\u2014
\u2014
\u2014
1
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
\u2014
\u2014
Maximum debit balance during the year2
2
\u2014
Helen Normoyle
Loans
\u2014
264
(264)
\u2014
\u2014
\u2014
\u2014
\u2014
Overdraft/Credit Card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
\u2014
264
(264)
\u2014
0
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
2
\u2014
Maximum debit balance during the year2
267
\u2014
Basil Geoghegan
Loans
\u2014
663
(37)
627
\u2014
\u2014
\u2014
\u2014
Overdraft/credit card1
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
\u2014
663
(37)
627
\u2014
\u2014
\u2014
\u2014
Interest charged during the year
13
\u2014
Maximum debit balance during the year2
669
\u2014
1. Amounts advanced and repaid are not shown for overdraft/credit card facilities as these are revolving in nature (i.e. they may be drawn, repaid and redrawn up to
their limit over the course of the year).
2. The maximum debit balance is calculated by aggregating the maximum debit balance drawn on each facility during the year.
46\u00a0 Related party transactions continued
(d) Companies Act 2014 disclosures continued
(i) Loans to Directors continued
Helen Normoyle held an overdraft facility which was not used during the year. Ann O\u2019Brien held a credit card facility\u00a0with the Group which had an
opening and closing balance of less than \u20ac1,000 at the beginning and end of the reporting period. However, the maximum debit balance exceeded
\u20ac 1,000 in the period, and has been reported in the preceding table. Anik Chaumartin, Donal Galvin, Sandy Kinney Pritchard, Andy Maguire, Elaine
MacLean, Brendan McDonagh, Jim Pettigrew, Jan Sijbrand, Fergal O\u2019Dwyer and Raj Singh had no credit facilities with the Group in 2024.
All facilities are performing to their terms and conditions. All loans to Directors and their connected persons are made in the ordinary course of
business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for similar transactions with other
persons unconnected with the Group and of similar financial standing and do not involve more than normal risk of collectability.
An expected credit loss allowance is held for all loans and advances. Accordingly, a total expected credit loss allowance of under \u20ac 500 was held
on the above facilities at 31 December 2024 (2023: under \u20ac 500).
(ii) Connected persons
The aggregate of loans to connected persons of Directors in office during the year ended 31 December 2024 and 2023 are set out in the table below.
Loans to connected persons of Directors in office during the year have not been disclosed if their balance did not exceed \u20ac 7,500 in the year.\u00a0
2024
2023
Balance at
31 December
2024
Maximum
amount
outstanding
during the
year
Number of
persons at
31 December
2024
Maximum
number of
persons
during the
year
Balance at
31 December
2023
Maximum
amount
outstanding
during the
year
Number of
persons at\u00a0
31 December
2023
Maximum
number of
persons
during the
year
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Tanya Horgan
407
428
2
4
426
445
3
4
Brendan McDonagh
9
11
1
1
9
9
1
1
Helen Normoyle
48
53
2
3
52
57
3
3
Ann O\u2019Brien
68
73
1
1
73
161
1
1
Fergal O\u2019Dwyer1
1
27
1
3
25
245
3
3
Basil Geoghegan
1
9
2
2
\u2014
\u2014
\u2014
\u2014
Andy Maguire
23
25
1
1
\u2014
\u2014
\u2014
\u2014
Donal Galvin
140
165
1
1
\u2014
\u2014
\u2014
\u2014
1. As at 31 December 2024, a guarantee entered into by a connected person of Fergal O\u2019Dwyer in favour of the Group amounted to \u20ac20,000. No amounts were paid or
liability incurred in fulfilling the guarantee.
An expected credit loss allowance is held for all loans and advances. Accordingly, a total expected credit loss allowance of less than \u20ac 20,000 was
held on the above facilities at 31 December 2024 (2023: less than \u20ac 1,000).
The value of arrangements at the beginning and end of the financial year as stated above in accordance with Section 307 of the Companies Act
2014, expressed as a percentage of the net assets of the Group at the beginning and end of the financial year, is less than 1%.
(e) IAS 24 Related Party Disclosures
The following disclosures are made in accordance with the provisions of IAS 24 Related Party Disclosures (\u2018IAS 24\u2019). Under IAS 24,
Key\u00a0Management Personnel (\u2018KMP\u2019) are defined as comprising Executive and Non-Executive Directors together with Senior Executive Officers,
namely, the members of the Executive Committee. As at 31 December 2024, the Group had 27 KMP (2023: 25 KMP).
(i) Transactions with Key Management Personnel
Loans to KMP and their close family members (\u2018CFM\u2019) are made in the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable transactions with other persons of similar standing not connected with
the Group, and do not involve more than the normal risk of collectability or present other unfavourable features. Loans to Directors and Senior
Executive Officers are made on terms available to other employees in the Group generally, in accordance with established policy, within limits
set\u00a0on a case-by-case basis.
2024
2023
Balance at
1\u00a0January
2024
Balance at
31 December
2024
Total
number of
relevant
KMP/CFM at
1 January
2024
Total number
of relevant
KMP/CFM at
31 December
2024
Balance at
1 January
2023
Balance at
31 December
2023
Total
number of
relevant
KMP/CFM\u00a0 at
1 January
2023
Total number
of relevant
KMP/CFM at
31 December
2023
\u20ac 000
\u20ac 000
\u20ac 000
\u20ac 000
Loans
1,975
2,281
13
15
1,563
1,975
13
13
Deposits
2,084
2,211
29
33
2,048
2,084
32
29
Total commitments outstanding refers to the total of any undrawn amounts on credit cards and/or overdraft facilities provided to KMP and their
CFM. Total commitments outstanding as at 31 December 2024 were \u20ac 0.09 million (2023: \u20ac 0.12 million). An expected credit loss allowance is held
for all loans\u00a0and advances. Accordingly, a total expected credit loss allowance of less than \u20ac 1,000 was held on the above facilities at 31 December
2024 (2023: \u20ac 1,000).
46\u00a0 Related party transactions continued
(e) IAS 24 Related Party Disclosures continued
(ii) Compensation of Key Management Personnel
Details of compensation paid to KMP are provided below. The figures shown include the figures separately reported in respect of Directors\u2019
remuneration on pages 163 and 165.
2024
2023
\u20ac m
\u20ac m
Short term benefits (salaries, fees and other short-term benefits)
8.4
7.5
Post-employment benefits1
1.1
1.0
Termination benefits
\u2014
0.4
Total compensation of key management personnel
9.5
8.9
1. Comprises payments to defined benefit or defined contribution pension schemes, in accordance with actuarial advice, to provide post-retirement pensions. The Group\u2019s
defined benefit pension schemes closed to future accrual with effect from 31 December 2013 and all employee pension benefits have accrued on the basis of defined
contributions since that date.
(f) Summary of relationship with the Irish Government
The Irish Government is recognised as a related party under IAS 24 as it is in a position to exercise significant influence over the Group.
Relationship Framework
In order to comply with contractual commitments imposed on the Group in connection with its recapitalisation by the Irish State and with the
requirements of EU state aid applicable in respect of that recapitalisation, a Relationship Framework was entered into between the Minister and the
Group in March 2012. This provides the framework under which the relationship between the Minister and the Group is governed. The Relationship
Framework was amended and restated on 12 June 2017. Furthermore, the AIB Group plc Relationship Framework was put in place on 8 December
2017 in substitution for the Relationship Framework dated 12 June 2017. Under the relationship framework, the authority and responsibility for strategy
and commercial policies (including business plans and budgets) and conducting the Group\u2019s day-to-day operations rest with the Board and the Group\u2019s
management team, however the Group remains subject to certain obligations which require advance consultation with or approval by the State.
These obligations relate to, inter alia:
\u2013 The composition of the board;
\u2013 Declaration and payment of dividends;
\u2013 Restrictions on various types of remuneration;
\u2013 Buy-backs or redemptions by the Group of its shares; and
\u2013 Material acquisitions/disposals.
The relationship of the Irish Government with the Group is outlined under the following headings:
\u2013 Ordinary shares
At 31 December 2024, the State\u2019s shareholding in the Company has reduced to 442,373,123 ordinary shares (18.99%) following a directed
share buyback, the sell down of shares, the placing of shares, and disposals as part of a pre-arranged trading plan. At 31 December 2023,
the\u00a0State held 1,067,638,190 ordinary shares (40.77%).
\u2013 Issue of warrants to the Minister for Finance
In 2017, the Group issued warrants to the Minister to subscribe for 271,166,685 ordinary shares. Following the reduction in issued share capital
during the year, these warrants equate to 11.65% of the issued share capital at 31 December 2024. For further details see note 35.
\u2013 Guarantee schemes
European Communities (Deposit Guarantee Scheme) Regulations 2015
Eligible deposits (including credit balances in current accounts, demand deposit accounts and term deposit accounts) of up to \u20ac\u00a0100,000 per
depositor per credit institution are covered under this scheme. The scheme is administered by the CBI and is funded by the credit institutions
covered by the scheme.
Strategic Banking Corporation of Ireland Scheme
The Group through its participation in the Strategic Banking Corporation of Ireland (\u2018SBCI\u2019) Support loan Schemes (the \u2018Schemes\u2019) benefits from
a\u00a0Government guarantee against losses on qualifying finance agreements on amounts advanced under the Schemes. At 31 December 2024,
\u20ac\u00a0481\u00a0million (2023: \u20ac\u00a0548 million) is outstanding across individual schemes of which the Future Growth Loan Scheme; Brexit/COVID-19 Working
Capital Loan Schemes, Growth & Sustainability Loan Schemes, Covid-19 and Ukraine Credit Guarantee Scheme benefit from up to 80%
Government guarantee.
Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009
The Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 was one of various stabilisation measures implemented by the State to support the
Irish banking system including the Group. The Group no longer has any guaranteed liabilities under the scheme however, certain of the covenants in the
scheme continue to apply to the Group including reporting covenants, until the scheme is terminated by the Minister for Finance.
46\u00a0 Related party transactions continued
(f) Summary of relationship with the Irish Government continued
\u2013 NAMA
The Group has provided NAMA with a series of indemnities relating to transferred assets. Any indemnity payment would result in an outflow of
economic benefit for the Group.
The General Scheme of the Conclusion of IBRC Special Liquidation and Dissolution of NAMA Bill 2024 (the Bill) was approved by Government
on 2 July 2024 and has not been enacted to date. Its purpose is to effect the conclusion of the IBRC Special Liquidation and the dissolution of
NAMA. It also makes provision for the implementation of appropriate arrangements to manage any remaining residual activity of IBRC and
NAMA following the conclusion of their work mandates, including through the creation of a new Resolution Unit within the National Treasury
Management Agency (NTMA) to manage any remaining residual activity.
\u2013 Irish bank levy
The bank levy was calculated based on each financial institution\u2019s deposits at December 2022 which were either covered under the Deposit
Guarantee Scheme or were not so covered but had preferential status under Article 108 of the BRRD. The annual levy paid by the Group for
2024 and reflected in operating expenses (note 10) in the income statement amounted to \u20ac 94 million (2023: \u20ac 37 million). In 2023 the bank levy
was calculated based on each financial institution\u2019s Deposit Interest Retention Tax (\u2018DIRT\u2019) payment in a base year with 2019 being the base
year for 2023.
\u2013 Other transactions with the Irish Government and entities under its control
In addition to the above matters, the Group also enters into other normal banking transactions with the Irish Government, its agencies and
entities under its control. This includes transactions with (i) Government related entities, (ii) local government and commercial semi-state bodies
and (iii) financial institutions under Irish Government control/significant influence. Other transactions include the payment of taxes, pay related
social insurance, local authority rates, and the payment of regulatory fees, as appropriate.
(i) Irish Government and related entities
The following table outlines the amounts outstanding at 31 December 2024 and 2023 with Irish Government and related entities which are
considered individually significant (excluding accrued interest). Related entities includes departments of the Irish Government located in the State
and embassies, consulates and other institutions of the Irish Government located outside the State. The Post Office Savings Bank (\u2018POSB\u2019) and
the National Treasury Management Agency (\u2018NTMA\u2019) are also included.
2024
2023
Balance
Balance
\u20ac m
\u20ac m
Assets
Cash and balances at central banks1
31,525
33,282
Trading portfolio financial assets
71
54
Investment securities2
4,088
4,356
Liabilities
Trading portfolio financial liabilities
257
134
Customer accounts
402
466
1. Cash and balances at central banks represent the placements which the Group holds with the Central Bank.
2. Investment securities at 31 December 2024 comprise \u20ac 4,088 million (2023: \u20ac 4,356 million) in Irish Government securities held in the normal course of business.
The Group has disclosed details of the share buyback and the Irish bank levy separately in these financial statements. All other banking transactions
are entered into in the ordinary course of business under normal business terms.
(ii) Local government1 and Commercial semi-state bodies2
During 2024 and 2023, the Group entered into banking transactions in the normal course of business with local government bodies and semi-state
bodies. These\u00a0transactions include the granting of loans and the acceptance of deposits, as well as derivative and clearing transactions.
1. This category includes local authorities, borough corporations, county borough councils, county councils, boards of town commissioners, urban district councils,
non\u2011commercial public sector entities, public voluntary hospitals and schools.
2. Semi-state bodies is the name given to organisations within the public sector operating with some autonomy. They include commercial organisations or companies
in\u00a0which the State is the sole or main shareholder.
46\u00a0 Related party transactions continued
(f) Summary of relationship with the Irish Government continued
(iii) Financial institutions under Irish Government control/significant influence
The Irish Government has a controlling interest in Permanent tsb plc and controls the Irish Bank Resolution Corporation Limited (In Special
Liquidation). Due to the Group\u2019s related party relationship with the Irish Government, balances between these financial institutions and the Group
are considered related party transactions in accordance with IAS 24. Transactions with these institutions are normal banking transactions entered
into in the ordinary course of cash management business under normal business terms. The transactions constitute the short-term placing and
acceptance of deposits, derivative transactions, investment debt securities and repurchase agreements.
The following balances were outstanding in total to these financial institutions at 31 December 2024 and 2023:
2024
2023
\u20ac m
\u20ac m
Assets
Trading portfolio financial assets
5
\u2014
(g) Indemnities
The Group has indemnified the Directors of Allied Irish Banks Pensions Limited and AIB DC Pensions (Ireland) Limited, the trustees of the Group\u2019s
Ireland defined benefit pension scheme and defined contribution pension scheme, respectively, against any actions, claims or demands arising out
of their actions as Directors of the trustee companies, other than by reason of wilful default.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-667": { "value": "
47\u00a0 Employees
The following table shows the geographical analysis of the average number of employees for 2024 and 2023:
Average number of staff (Full time equivalents)
2024
2023
Ireland
9,902
9,485
United Kingdom
718
681
United States of America
35
34
Total
10,655
10,200
The following table shows the segmental analysis of the average number of employees for 2024 and 2023:
2024
2023
Retail Banking
4,084
4,484
Capital Markets
1,676
1,139
Climate Capital1
76
46
AIB UK
625
604
Group2
4,194
3,927
Total
10,655
10,200
1. Refer to note 1(c) for further information about the change in presentation for certain notes to the financial statements.
2. Group comprises wholesale treasury activities and Group control and support functions. Treasury manages the Group\u2019s liquidity and funding positions and provides
customer treasury services and economic research. The Group control and support functions in the period included Technology, Operations, Finance, Risk, Legal,
Corporate Governance and Customer Care, Human Resources, Sustainability and Corporate Affairs, Enterprise Development and Group Internal Audit.
The average number of employees for 2024 and 2023 set out above excludes employees on career breaks and other unpaid long-term leaves.
Actual full time equivalent numbers at 31 December 2024 were 10,469 (2023: 10,551).", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-668": { "value": "
50\u00a0 Dividends
A final dividend for the year ended 31 December 2023 of 26.568 cent per ordinary share, amounting to \u20ac 696 million (for the year ended 31\u00a0December 2022:
\u20ac 166 million), was approved at the Annual General Meeting on 2 May 2024 and subsequently paid on 10 May 2024. Final\u00a0dividends are not accounted
for until they have been approved at the Annual General Meeting of shareholders.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-669": { "value": "0.26568", "decimals": 5, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-671": { "value": "
51\u00a0 Non-adjusting events after the reporting period
No significant non-adjusting events have taken place since 31 December 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNonadjustingEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-670": { "value": "
51\u00a0 Non-adjusting events after the reporting period
No significant non-adjusting events have taken place since 31 December 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-672": { "value": "
52\u00a0 Approval of the Financial Statements
The financial statements were approved by the Board of Directors on 4 March 2025", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400AKJBGNS5WNQL34", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fn-1": { "value": "Net cash flow from operating activities, including the impact of related cash flow hedges, includes interest received of \u20ac 5,354 million (2023: \u20ac 4,499 million) and
interest paid of \u20ac 466 million (2023: \u20ac 137 million).
", "dimensions": { "concept": "xbrl:note", "noteId": "fn-1", "language": "en" } }, "fn-2": { "value": "Relates to debt securities classified at origination as MREL.", "dimensions": { "concept": "xbrl:note", "noteId": "fn-2", "language": "en" } } } }