Brian J Goggin, Bank of Ireland Group Chief Executive

Bank of Ireland today said it had accepted the recommendations of the Chairman of the talks process with staff representatives, Mr Kieran Mulvey, on the employee aspects of its Strategic Transformation Programme, involving 2,100 job cuts. The Bank said that its acceptance is subject to the normal approval processes.

Bank of Ireland said the Recommendations represented a fair and balanced outcome and would enable the Bank to move ahead with the implementation of the Programme.

The Recommendations issued by Mr Mulvey follow a period of intensive discussions with staff representatives after Bank of Ireland published details of its Strategic Transformation Programme on March 22nd.  Mr Mulvey notes that all parties recognise the need:

• "To improve the competitive position of Bank of Ireland
• To address and respond to the changes taking place in the current financial services market
• To provide greater job security for those staff remaining with the Bank.
• To provide an improved overall level of service to customers.
• To reduce the Bank's cost, through reducing staff numbers and the reconfiguration of the  Bank's retail, manufacturing, customer support and internal support infrastructures"

In the course of a detailed document the recommendation goes on to outline
specifics to apply to staff affected by the change programme including:

• Severance terms for staff in Republic of Ireland and UKFS.
• Early retirement arrangements for staff who have reached certain age and/or service thresholds.
• A provision for an early retirement option that would be available to a defined number of employees across the Group.
• Provision of outplacement services.

In relation to employees who will remain with the Group, recognising the contribution of these employees to the successful implementation of the programme, Mr. Mulvey recommends an enhancement to the Staff Stock Issue (SSI) for the duration of the programme.  In addition a reduction in the standard working week to 35 hours, without reduction in pay, is recommended.

In his conclusion Mr. Mulvey states that "The negotiations conducted under my chairmanship, though difficult, have been marked by a constructive approach by all parties".  He "commends these recommendations" and expresses a hope that they represent a reasonable balance of interest and equity between the aspirations and expectations of all parties."

Commenting on the publication today of the recommendations from Kieran Mulvey, Bank of Ireland Group Chief Executive, Brian Goggin said:

 "I welcome these recommendations produced under the expert Chairmanship of Kieran Mulvey and resulting from intensive engagement with staff representatives.  The financial services industry is changing and Bank of Ireland is fortunate to be able to embrace this change from a position of strength, given our track record of positive performance over recent years. We need to build on our strengths and ensure we can continue to deliver enhanced value and innovation for customers, greater shareholder value for investors and sustainable, quality employment for our staff.  The Strategic Transformation Programme, by delivering greater efficiency, will enable us to do this and to deliver on the full growth potential of the business."

Bank of Ireland Group announced its Strategic Transformation Programme on 22nd March 2005 as the means of delivering a competitive, lower-cost operating model.  The immediate focus is on a programme of specific actions to reduce costs while also starting to build a more consolidated operating model.  The objective is to provide the efficiency and flexibility to enhance competitiveness and to capitalise on growth opportunities.  The Programme consists of specific efficiency initiatives in the Retail business in Ireland, the streamlining of some Group support services and the consolidation of some processing activities currently dispersed
throughout the Group.

An annual reduction in costs of €120 million is targeted, to be achieved over the next four years.  This consists of €30 million savings in 2005/06, increasing to €75 million in 2006/07, to €105 million in 2007/08 resulting in an annual reduction in costs of €120 million in 2008/09.  a reduction of 2,100 in the Group's staff numbers is associated with this Programme.

The rationalisation and implementation costs to achieve the savings will amount to approximately €210 million.  In addition, capital expenditure of approximately €40 million will be invested in technology and automation as part of the Programme.