.. World Retail Banking Report – SRG Price Comparison including Ireland LONDON Report to the Irish Bankers Federation

August 2005 Comment

• This is a comparative study of consumer current account banking in Ireland and is compared to the findings from the World Retail Banking Report, using the same input and methodology.

• This analysis is based on input from 5 Irish banks, was conducted on a like for like basis and covers account management, means of payment, cash utilization and exceptions handling only and not other revenue streams.

• In the Irish market government taxation, such as ATM card levy and stamp duty, have been excluded from analysis.

Capgemini • Proprietary and Confidential -2- The purpose of this study is to include and compare Ireland’s retail banking to the findings of the World Retail Banking Report 2005

Background Capgemini undertakes an annual survey of Retail Banks to produce the World Retail Bank Report (WRBR). This survey samples key retail banks and their consumer products to compare charges across countries and trends over previous years. To date this survey has not included Ireland. The Irish Bankers Federation, representing the banking industry in Ireland, have requested Capgemini to conduct a comparative study to the 2005 survey for the Irish market.

Approach Gather pricing data direct from 5 major Irish banks for the selected basket of products and services used in the 2005 WRBR.

Scope – The survey covered 19 products and services as at September 2004 – Whereas WRBR provides country overviews (dashboards), pricing (global and local index) and client interviews (spotlight), our focus was on pricing only. – Stamp duty was excluded for all analysis.

Output – Comparative analysis of the cost of banking in Ireland using a standard global usage profile and the actual local usage profile.

Capgemini • Proprietary and Confidential -3- The scope of the report is core day-to-day banking products and services

Retail banking products & services WRBR Index scope CoreCore day-to-dayday-to-day Core day-to-day banking ProductsProducts andand servicesservices detaileddetailed bankingbanking needsneeds • Account management • Means of payment Current account Account • Cash utilization Online banking management • Exceptions handling Call center

Cheque book Savings Debit card • Certificates of deposit Credit card • Mutual funds Means of payment Internal wire transfer • Other savings vehicles External wire transfer Standing order (regular amount transfer) Credit Direct debit • Overdrafts Cash deposit at desk • Consumer credit • Revolving credit Cash deposit at ATM • Mortgages Cash utilization Withdrawals at Desk • Loans Withdrawals at bank’s ATM Withdrawals at other banks’ ATM network Other products & services Debit card stop payment / blocking • Insurance Stop payment / check blocking • Real estate Exception handling Document search • Concierge services Banker’s draft ( cashier’s check)

Capgemini • Proprietary and Confidential -4- Survey sample: 135 retail banks in 20 countries

65%74% 66%67% 69%91% 89%89% 51%66% 85% N/A 71%70% 54%54% Austria Belgium France Germany Italy Nether. Portugal Spain

• BA-CA • • Banques Populaires • • Unicredit • ABN AMRO • CGD •BBVABBVA • IberCaja •SCH • WBC • Fortis Bank • BNP Paribas • • Banca Intensa • ING Bank • BCP •LaSCH Caixa • Unicaja • Bawag • ING Bank • Bred • HVB • SanPaolo imi • Postbank • BES •CajamadridLa Caixa • Sparkassen sector • KBC • Caisses d’Épargne • Postbank • MPS • • Totta •BanestoCajamadrid •Banco Popular • Raiffeisen sector • CCF HSBC • Dresdner Bank • BNL • SNS Bank • BPI •CaixaBanesto Cataluña • Volksbanken sector • CIC • Savings banks sector • Banca di Roma • Fortis Bank •BancoBanco Sabadell Popular

Euro Zone Bancaja • Crédit Agricole • Mutual banks sector • Caixa Cataluna •CAM • Crédit Lyonnais •BankinterBanco Sabadell • Crédit Mutuel •IberCajaBancaja •Unicaja NEW • Société Générale NEW • CAM • La Poste •

57%73% 63%69% 89%96% 83% 79% 90%89% 100%100% 87%87% Czech Rep Norway Poland Slovakia Sweden Switzer. UK

• CSOB • DnB NOR •PKO BP •Kredyt • HVB Bank Slovakia • Svenska • UBS • HSBC •PEKAO Bank • CS • • Slovenska Sporitel’na • • CS • RBOS •BPH •BZ WBK • Tatra Banka • Raiffeisen • KB • Sparbank 1 Alliansen • •BGŻ • Nordea • • Fokus •BRE •Millenium • UniBanka • SEB • Postfinance • HBOS •ING •Reiffeisen • Vseobecna Uverova • • Kantonalbanken sector • Lloyds TSB Banka • SkandiaBanken • Regionalbanken sector • Ceskoslovesnka Obchodna Banka Europe non Euro 86% N/A NEW NEW NEW NEW Ireland

90%86% 89%75% 94%94% 51% N/A • Australia China Canada U.S. Key • AIB Bank

• ABN AMRO • Permanent tsb • CBA •ABC •CMB • BMO •BC •Minsheg • Bank of America- • WBC • CIBC deposits credits •BOC •Pudong FleetBoston • Ulster Bank • NAB •CCB •Shenzen • Desjardins • Bank One • St George •ICB • RBC • National Irish Bank • Citigroup • ANZ • Scotia • HSBC • TD NEW In 2005 added 8 • J.P. Morgan Chase countries and 51 banks • Sun Trust • U.S. Bancorp • Wachovia NEW NEW • North AmericaAsia + Pac • Washington Mutual

Capgemini • Proprietary and Confidential -5- There are two methods used to compare cost of banking services across countries, use of a global theoretical usage profile and an actual local usage profile

Global profile versus local profile

How much a fictional person would GlobalGlobal profileprofile Identical frequency of use for all countries pay for a specific basket of banking products (2004(2004 andand 2005)2005)

Local profile Frequency of use tailored by country to How much domestic customers Local profile reflect local consumption patterns actually pay for banking (only(only 2005)2005)

Capgemini • Proprietary and Confidential -6- The cost of core banking services in Ireland based on a global comparable usage profile is low at €59

Annual weighted prices of core banking services by country using global usage profile, 2005 (€) Commentary

300 • Ireland’s cost of banking is €591 vs. the global 252 average of €108 250 223 • The cost is comparable to the UK at €64 200 – 10% cheaper than UK • In Ireland there is a mix of 159 pricing strategies 150 131 amongst the banks: 126 – Transactional based pricing 108 2005 Average €108 105 101 99 99 on payment and cash 93 93 utilization products, e.g. 100 83 81 80 cheque book, debit card 64 63 59 54 cash deposits at desk and

Annual weighted prices 2005 € 2005 prices weighted Annual withdrawals at bank’s ATM 50 34 etc – Penalty based structure 0

y y d lic K d ay US b U um n ina ds Ital rw lan ralia h man Spain o rtugal ustria gi C lan r erland o P France st Irela e z N CanadaA Sweden Bel er G Slovakia Po Repu Au th e Swit ch N Cze

Source: Capgemini analysis 2005, WRBR 2005 1) Analysis was based on 5 banks that accounted for 86% of the market Capgemini • Proprietary and Confidential -7- Banking prices in the Euro zone countries have begun to converge, as the effects of the common currency take hold

Commentary Prices of seven Euro zone 2001-2005 (€) • With the inclusion of Ireland, 300 nine countries in the Eurozone were surveyed 247 252 250 226 223 CONVERGENCE • Ireland’s price is €59, less than half of the Euro zone average of €130 200 +3.1% • Prices rose in the Euro zone countries that were below last 150 126 130 year’s average (Spain, 108 Netherlands and Belgium) 101 -4.4% 93 99 while countries that were 100 above the average decreased 67% 64 58 63 59 or remained stable Annual weighted prices 2005 € 2005 prices weighted Annual 50 31 34

0

s 1 d ce nd ce ar Italy ium nd a pri Spain g el ice Fran Ir tand Germany Bel S etherla N verage A Deviation as a % of pr 2004 2005

Source: Capgemini analysis 2005, WRBR 2005 1: No prior year data Capgemini • Proprietary and Confidential -8- Using actual local usage profiles, the cost of banking in Ireland is still low at €42

Annual weighted prices of core banking services by country using local usage profile, 2005 (€) Commentary

160 • Ireland’s cost of banking is €421 vs. the local

137 average of €78 140 • The cost is significantly cheaper than the UK 123 at €65 113 120 – 35% less than the UK 102 98 • Local usage profiles more accurately reflect 100 93 91 89 consumption patterns and thus the real cost 81 79 76 2005 Average of basic banking for domestic customers. 80 69 68 65 €78 • Cheque usage in Ireland averaged at 48 57 60 49 48 cheques per year per Irish individual 42 – US had the highest cheque usage with 70 per 40 29 individual per year 25 – Note: Ireland charges Stamp Duty for cheques, this Annual weighted prices 2005 € 2005 prices weighted Annual 20 is not standard practice in other countries • Direct debits and standing orders usage in 0 Ireland was higher than cheques

UK • Surprisingly there is little variation in usage US Italy Spain China Ireland

Poland France patterns between those Irish banks who Austria Norway Canada Sweden Belgium Slovakia Portugal Australia Germany charge for both ATM withdrawals at their Switzerland Netherlands bank and others, and those who do not Czech Republic charge at all. Withdrawal frequency at other banks ATM’s was higher in countries where no charges were applied – for example in Austria, Sweden and the UK.

Source: Capgemini analysis 2005, WRBR 2005

1) Analysis was based on 3 banks that accounted for 70% of the market: Capgemini • Proprietary and Confidential -9- The cost of banking services in Ireland is also low on a GDP per capita basis compared to other mature markets

Local profile prices of core banking services versus GDP per inhabitant (%) Commentary

3.50% • Ireland cost as a % of GDP per 3.30% capita is 0.13%.

3.00% • This is half that in the UK at 0.27% 2.50%

2.10% • Some developing countries are 2.00% very high, e.g. Poland or China, however most mature markets are in the range 0.2% - 0.4% 1.50% • Only the Netherlands and 1. 0 1% 1.00% 0.95% Sweden are comparable to Ireland 0.58%0.55% 0.60% 0.49% 0.50% 0.39% 0.42% 0.37% 0.30% 0.31% 0.35% Banking services follow the 0.26% 0.27%0.24% • 0.18% 0.13% 0.10% standard industrial development 0.00% pattern in which relative prices decline with maturity. y a c s nd lia S ce in ia al i K en nd na taly U n a tr g bl U kia a i a I s nad man oland Sp u a pu lgium ed va el Ch rland ustr Norway P Fra A C e w Ir e A Ger Portu B S Slo th Switzerla e ech Re N z C

Source: Capgemini analysis 2005, WRBR 2005

Capgemini • Proprietary and Confidential -10- Summary

• The cost of banking in Ireland is well below the average of countries in the survey using a standard global usage profile and on a local basis as well. – Ireland’s price is €59, less than half of the Euro zone average of €130 (un-weighted)

• On a cost per capita basis, Ireland is among the cheapest in the world.

• Less headroom to major on pricing as an influence of customer behaviour compared to other countries, for the products and services covered.

Capgemini • Proprietary and Confidential -11- Contacts

Capgemini is a world leader in consulting, technology and outsourcing services. We are dedicated to helping our clients improve the economics of their business through cost-reduction and revenue-growth initiatives that offer an immediate return on investment.

The Group employs more than 60,000 people throughout Europe, North America, and the Asia-Pacific region, and reported global revenues of approximately 6.3 billion euros in 2004. We offer local and international clients in 35 countries a range of services, including consulting, technology, and outsourcing.

Capgemini has developed extensive expertise in retail banking over 30 years. Our professionals cooperate in the firm’s global network, serving the world’s leading financial services organizations. Through this highly skilled network, our consultants share knowledge, create leading-edge ideas, and establish industry-wide competencies that ensure our clients receive the best possible advice and assistance.

The Group’s Retail Banking practice helps clients develop leading innovative strategies. We work side-by-side with our clients to implement successful solutions, including customer relationship management; Internet-based, self-directed, and full-service offerings; front-and back-office systems; straight-through processing; project management; and outsourcing

•For further information please contact: – Peter Minogue on +353 (1) 6390206 – Brian Gannon on +44 870 906 7425

Capgemini • Proprietary and Confidential -12-