Ireland

Northern and National Irish Banks

Profit & Loss Australian Dollars	Half Year to			Favourable / (Unfavourable) Change from
	Mar 01 $m	Sept 00 $m	Mar 00 $m	Sept 00 %	Mar 00 %
Net interest income	248	233	225	6.4	10.2
Other operating income	122	119	106	2.5	15.1
Total operating income	370	352	331	5.1	11.8
Other operating expenses	210	211	190	0.5	(10.5)
Underlying profit	160	141	141	13.5	13.5
Provision for doubtful debts	8	16	11	50.0	27.3
Profit before tax	152	125	130	21.6	16.9
Income tax expense	47	41	40	(14.6)	(17.5)
Profit after tax before goodwill and abnormals	105	84	90	25.0	16.7

Profit & Loss Pounds Sterling	Half Year to			Favourable / (Unfavourable) Change from
	Mar 01 £m	Sept 00 £m	Mar 00 £m	Sept 00 %	Mar 00 %
Net interest income	91	90	90	1.1	1.1
Other operating income	44	46	41	(4.3)	7.3
Total operating income	135	136	131	(0.7)	3.1
Other operating expenses	77	82	76	6.1	(1.3)
Underlying profit	58	54	55	7.4	5.5
Provision for doubtful debts	3	6	4	50.0	25.0
Profit before tax	55	48	51	14.6	7.8
Income tax expense	17	16	16	(6.3)	(6.3)
Profit after tax before goodwill and abnormals	38	32	35	18.8	8.6

Key Performance Measures

Net interest margin	3.54%	3.61%	3.74%
Other operating income / total income	32.6%	33.8%	31.3%
Cost income ratio	57.0%	60.3%	58.0%
Gross non-accrual loans to gross loans and acceptances	1.27%	1.21%	0.87%

Highlights

The National's two banks in Ireland increased profit by $15 million to $105 million, or 16.7% on the previous corresponding half year. In GB pounds, operating profit increased 8.6% compared to the previous corresponding period and by 18.8% compared to the prior half. The September 2000 half year contained a number of one off expenses in relation to the Deposit Interest Retention Tax settlement of IP5.3 million and investigation costs in National Irish Bank.

Net interest income increased by GBP 1 million or 1.2% on the previous corresponding period, through growth in business lending and mortgages. The combined Northern Bank and National Irish Bank net interest margin declined by 20 basis points from 3.74% to 3.54% since the March 2000 half year, due to regional competitive pressures on lending margins.

Other operating income increased by GBP 3 million or 7.3% compared to the March 2000 half year, but fell by GBP 2 million or 4.3% compared to the September 2000 half year which benefited from profits on property disposals.

Other operating expenses were steady on the previous corresponding period reflecting sound cost management. After adjusting for the Deposit Interest Retention Tax settlement, other operating expenses remained in line with the September 2000 half year.

In GBP bad and doubtful debts remained steady compared to the previous corresponding period.