Good morning, you're very welcome to our results presentation. In the first half of 2021, we've seen a strong recovery in our performance. We've continued to deliver our strategy. We've maintained a laser-like focus on costs. Our economic outlook is increasingly positive, with sentiment back to pre-pandemic levels, and we've announced two significant acquisitions. This progress is reflected in our results. Group operating profit of EUR 465 million is up 72% compared with the same period last year. If we leave aside the turbulent year of 2020 and compare our results to the same period in 2019, our underlying operating profit pre-impairment is up 7%. Our asset quality remains strong, supported by the improving economic backdrop. Our net impairment charge of just EUR 1 million reflects this, with the group's NPE ratio improving by 20 basis points to 5.5%. Myles will give further detail on these points shortly. We've also maintained a crystal clear focus on delivering our multi-year strategy. That includes in the following five key areas. Our discipline regarding cost improvement is well established. Today, we are announcing a further reduction in cost for the seventh consecutive reporting period. We have continued to invest in our digital capabilities and product journeys, which is driving improved customer satisfaction. In the U.K., our transformation of our business model has delivered a turnaround in financial performance, reporting a 52% increase in operating profit. Our planned acquisitions of Davy and KBC Bank Ireland further strengthen our growth outlook and support our national champion ambition. We've strengthened our capital position, with our fully loaded CET1 ratio increasing by 70 basis points to 14.1%. Our purpose is to enable our customers, colleagues, and communities to thrive. Slide six shows some examples of how we've been living that purpose this year. To mention just a few, new customer lending is up 12%. 99% of all payment breaks have now concluded. Very positively, we've seen minimal impact on asset quality. Our financial well-being program continues to grow, with a circa 140% increase in customer financial health checks. In recognition of the group's progress, Euromoney recently named Bank of Ireland the best bank in Ireland for a second successive year. Slide seven sets out an increasingly positive macroeconomic outlook. The Bank of Ireland Economic Pulse stood at 89.3 in July, above its pre-pandemic level. We've seen a marked improvement in labor market conditions. Consumer spending is rebounding as the economy reopens. Latest data shows that, in volume terms, retail sales in Ireland in June 2021 were up over 13% when compared with June 2019. The multinational exporting sector also continues to be very resilient. All this contributes to a strong outlook for the Irish economy. We expect a strengthening in GDP growth in Ireland to 9% this year. This will be supported by increased household spending as some of the 17% growth in household deposits since the start of the pandemic is tapped into. These factors are expected to reduce unemployment further. Our positive economic outlook is also supported by Ireland's vaccine rollout, now amongst the highest in the world. In the U.K., we expect strong GDP growth of 6.8% this year, with another solid increase in 2022. In terms of Brexit, while there are ongoing challenges following last December's deal, we see indications that businesses are increasingly adjusting to the new trading arrangements. Slide nine shows how customer engagement continues to shift to digital. We recorded almost 22 million visits per month to our digital channels. That's up 8% on the same period last year, continuing a long-established trend. To date, 75% of all our product applications are fulfilled digitally, up from 69% last year. Our investment in digital also supports our strategic priority to drive improved customer satisfaction. Complaints have fallen 54% from H1 2019, and our mobile app customer effort score has more than doubled, improving from 24 points a year ago to 49 today. As set out on slide 10, our transformation is clearly delivering customer benefits and improved business outcomes. For example, this year, we launched a seamless digital journey for our Irish mortgage customers. We've also overhauled the digital process for small business and agricultural loan applications. Nearly three in four applications are now digital, compared to just one in four before the journey was enhanced. There's more to come. In the second half of this year, we'll introduce new customer engagement tools and enhance our mobile app with spending insights, nudges, and card management capabilities. As part of our strategy, cost reduction has remained firmly in our sights. On slide 11, you'll see that we have reduced costs consistently in the last seven reporting periods. Since 2017, we've decreased gross costs by over EUR 300 million or 17%. This reduction in cost has given us the capacity to invest in our people and in our technology. Overall, net costs are down by 13% during this period. We are on track to deliver a cost base of below EUR 1.65 billion this year, and the building blocks are in place to reduce this to EUR 1.5 billion by 2023, based on our current business model. These building blocks include completing the voluntary redundancy scheme that we launched in 2020, delivering more digital journeys for our customers, completing the restructuring of our U.K. business, and reducing our property footprint. Transformation of our U.K. business model continues, as highlighted in the next slide. Today, we're reporting that our U.K. performance is significantly improved. In the first half, we delivered a 52% increase in operating profit. Net Interest Income grew 12%, costs reduced 11%, and we're growing in bespoke mortgages, which now account for more than 1/5 of our new U.K. mortgage lending. We are delivering these improved returns in the U.K. through higher new lending margins with clearly defined discipline and commercial risk appetite, reduced funding costs, lower operating costs, and a smaller, more profitable balance sheet. Growing our wealth and insurance business has been a core element of the strategy that we set out in 2018. Slide 13 details the organic growth that we have delivered over the first half, including an increase in operating profits of 27%, new premium sales up 34%, and assets under management growth of 17%. The digital platforms that we launched in our wealth and insurance business last year are also giving us the ability to scale. Today, over 2/3 of new individual pension business arrives digitally following the launch of our broker portal. Our wealth advice platform has seen 60% of applications on a straight-through process with sign-up time cut by 2/3, and nearly 40% of all general insurance policies are now generated via our digital wallet. We have recently announced two significant inorganic opportunities, which are highly complementary to our strategy. Whenever it comes to potential acquisitions, we always ask ourselves two key questions. Does it offer value to our shareholders, and is it a good fit for our business? The acquisitions of Davy and KBC Bank Ireland tick both boxes. Davy is the number one provider of wealth management and capital market services in Ireland. It is several times larger than its nearest Irish competitor and will bring about EUR 16 billion of assets under management to the Bank of Ireland Group. While we've grown our own wealth and insurance business organically by around a quarter since 2018, the Davy acquisition strongly supports our ambitions for further business growth, and it comes at a time when the demand for wealth products and services is increasing in Ireland. We've agreed to acquire Davy, which had an adjusted PBT of circa EUR 33 million in 2020, for an enterprise value of EUR 440 million. The next significant inorganic opportunity is the KBC Bank Ireland transaction, for which we entered into a memorandum of understanding in April. This is on a portfolio basis, and our interest is focused on circa EUR 9 billion of performing mortgage loans. KBC Bank Ireland has around 300,000 customers who we look forward to welcoming to the group. These transactions, which will be financed from internal resources, are important contributors to our mission to achieve sustainable returns above our cost of capital. Both are subject to standard regulatory and competition authority approvals. Turning now to slide 15. We've made good progress since the launch of our Responsible and Sustainable Business Strategy. There are three pillars to this strategy, and we are delivering under each. Highlights include our progress on gender diversity. We also launched a national campaign, The F Word, the F stands for finance, and challenged the taboo about talking about money. This campaign has contributed to Bank of Ireland being ranked first place amongst all brands in the latest Ipsos BrandShout. In the first half of 2021, we committed to expanding our sustainable finance fund by 250%, from EUR 2 billion to EUR 5 billion. We also raised EUR 1.25 billion from the launch of two green bonds. Before I conclude, I want to look ahead. We will refresh our medium-term targets at a strategy update, which is expected in 2022. We see clear growth opportunities for the group as economies recover from COVID-19, from changes to market dynamics in Ireland, and from the turnaround of our U.K. business. Given our strategic delivery in recent years, including on cost, wealth and insurance, digital transformation, and culture, these are all opportunities that we are very well placed to take advantage of. The KBC and Davy acquisitions will further our ambition to be the national champion bank in Ireland. The Irish government's decision to sell down its 14% ownership in Bank of Ireland is a milestone moment. This further normalizes the state's relationship with the group. Having been the first and only Irish bank to fully repay the taxpayer, Bank of Ireland will now be the first Irish bank to return to full private ownership. This is an important validation of our team and of our strategic direction. I'll now pass you over to Myles to take you through our financial performance in more detail before we move to Q&A. Thank you, Francesca, and good morning. I hope everyone is well. Today, we are pleased to report an underlying profit of EUR 465 million, representing a strong recovery in performance and improved outlook. A EUR 1 million net impairment charge with macro conditions benign, net lending growth, and an NPE ratio of 5.5%, down 20 basis points since the start of the year. Our capital position also strengthened in the period, reporting a regulatory CET1 of 15.3%. That's 14.1% on a fully loaded basis. We've seen increasingly positive economic conditions, supporting increased trading activity and minimal credit impairments. As set out on slide 20, total income increased by 14% in H1, with all businesses contributing to this strong performance. Net interest income was 2% higher, and I'll return to this in a few moments. Business income increased by 8%, valuation items made a positive contribution while operating expenses reduced by 4%, and non-core items of EUR 59 million were driven by planned restructuring costs. Slide 21 covers net interest income in detail. Our 2% increase in NII reflects tailwinds, including reduced funding costs and the application of negative interest rates to corporate deposits. Both of these factors were more than sufficient to offset headwinds, and these were from negative yields on liquid assets and reducing structural hedge income. The group has maintained its pricing discipline with the loan asset spread 16 basis points above the same period last year. We also participated in the TLTRO in March, which benefits interest income with further potential income upside to come in H2. Turning now to Slide 22, overall, the net lending book was higher at EUR 77.2 billion. On a constant currency basis, adjusting for planned U.K. deleveraging and a successful NPE transaction, the book grew by EUR 0.3 billion in H1. All divisions are demonstrating solid recovery, with new lending up 12%. That includes new lending growth of 38% in Corporate and 15% in Retail Ireland. As Francesca referenced, in the U.K., we saw strong growth in bespoke mortgages. These grew by 170% while retaining a disciplined approach to pricing and risk, which is a good demonstration of our strategy execution. The group's business income increased by 8%. The 5% increase in Wealth and Insurance reflects higher new sales activity and existing book income. Retail Ireland posted a modest decline as a result of lower card fee income. Growth in Corporate and Markets reflects higher underwriting fee income on the back of strong new lending in H1 and stable FX income. The contribution from valuation items is as a result of improved equity and financial markets. The outlook for business income is positive and expected to grow in H2, supported by continued reopening of the economy. As mentioned earlier, this is the seventh consecutive period in which we have reported lower costs. The EUR 35 million reduction we are announcing today is after absorbing wage inflation and higher pension costs of EUR 11 million. Our non-core charge is chiefly driven by ongoing business model restructuring. For this year, we reaffirm our target for operating expenses to be below EUR 1.65 billion. We have the building blocks in place to reach that target. For H1, we are reporting a EUR 1 million net impairment charge from improved economic conditions and minimal loss experience while maintaining coverage to address credit risk from the removal of COVID-19 government supports. I'd like to spend a few moments on the individual components of this charge. There are four key points to highlight. Firstly, improved macroeconomic forecasts resulted in a requirement to hold lower allowances and therefore an impairment write back of EUR 163 million. Secondly, this was broadly offset by model changes resulting in a charge of EUR 172 million, predominantly a prudent decision to change mortgage LGD assumptions and maintaining adequate coverage levels, including the application of LGD floors. Thirdly, there was minimal loan loss experience in H1. Finally, to capture the potential credit risk arising from customers who may experience credit difficulty after the removal of COVID-19 government supports, a release of EUR 8 million to P&L while maintaining EUR 229 million stock of management adjustments held on balance sheet for this latent risk. In terms of outlook, we expect the H2 impairment charge to be broadly similar to H1. Slide 26 updates on our NPE position. Overall, NPEs fell marginally in the period. We have a long track record of market leadership in the management of NPEs in Ireland. In the first half, NPEs reduced by 20 basis points to 5.5%, driven by an Irish residential mortgage transaction. In terms of our approach to NPEs, we will continue our successful dual track approach, combining working with customers to find sustainable solutions and transactions. Turning to slide 27, we have a diversified balance sheet with strong credit quality. On stage migration, stage two loans increased by a net EUR 2 billion in H1, primarily reflecting the reclassification of loans underpinning the post-model adjustment for business banking and mortgage portfolios. This has minimal P&L impact in H1 as a charge was taken in 2020. Our capital performance was very strong in H1. Our fully loaded CET1 ratio increased by 70 basis points, helped by 90 basis points of organic capital accretion, a minimal impairment charge, and the NPE transaction. Our regulatory CET1 ratio of 15.3% provides circa 550 basis points of headroom to our minimum regulatory capital requirements, excluding P2G. Moving now to outlook. We are guiding for H2 2021 total income to be circa 5% higher versus H1. This guidance reflects three key points. Higher net interest income, including the TLTRO upside, if the second benchmark is achieved in December, higher business income, and broadly unchanged valuation items versus H1. As Francesca set out, we re-read our guidance on costs. That is 2021 costs to be less than EUR 1.65 billion and 2023 costs of EUR 1.5 billion, based on current business model. On asset quality, subject to no material change in economic conditions or outlook, we expect the H2 impairment charge to be broadly similar to H1. On capital, our end 2021 CET1 ratios are expected to increase by circa 30-50 basis points above June levels, which captures a range of assumptions, including loan growth, transformation, and distributions. Additional balance sheet optimization initiatives are being progressed during H2, which will be incremental to this capital guidance. In relation to the important inorganic opportunities we have discussed this morning, the group has sufficient capital resources to support their execution, and distributions are to recommence on a prudent and progressive basis based on performance and capital outlook. Thank you very much for your attention this morning. We will now go to questions. Thank you. We will now begin the Q&A. If you wish to ask a question, please press the star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel that request, you can use the hash key. Once again, that is the star and one if you wish to ask a question. Thank you. Your first question comes from the line of Diarmaid Sheridan from Davy. Good morning, Francesca, Myles. I hope you're both well, and thank you for your presentation. Three questions, if I may. Firstly, on your guidance, and specifically on the income side, if you could provide a sense of the key moving parts on both net interest income and fee and commission, please. Secondly, mindful of your comments, Myles, I just wonder if we could understand the variables and probabilities associated with the dividend and capital distributions. Finally, just looking into 2022 and beyond, I wonder if we could get a comment on how inorganic opportunities might impact on earnings and return on tangible equity. Thank you. Thank you, Diarmaid, and good to have you on the call. There are three questions there. I'll go to the second and third, capital distribution and the sort of outlook for 2022 and beyond, given the M&A, and then Myles will loop back on guidance, particularly on revenue. In terms of capital distribution, so we obviously absolutely understand and support the importance of distributions to our shareholders and the strong capital position that we're reporting today, and given the guidance about future capital accretion, obviously support recommencement of distributions. As we've said, it is our intention to do so on a prudent progressive basis based on performance and outlook. It's also noteworthy that the strong capital position that we have today coincides with two fantastic and significant acquisition opportunities. Our belief is that allocating surplus capital to these transactions is the right decision. That in turn will materially enhance future returns. As these two acquisitions play out over the second half, Myles, myself, the board will discuss distributions at the full year and will make the appropriate decision at that time. Okay. In terms of just M&A and the future, obviously we've got two opportunities here, both of which create value for shareholders. They're both good strategic fits. Let me just briefly talk about each in turn and what that means in terms of a returns outlook over time. Obviously, Davy, market leader in wealth management, capital markets. The business is 75% wealth management, 25% capital markets that we're acquiring. It is a multiple of the nearest Irish competitor. It brings with it EUR 16 billion of AUM, and that just compares to our own organically grown wealth insurance AUM of about EUR 21 billion. This is a good increase. Very nice strategic fit. It gives us an opportunity to diversify revenue to include more business income and also to capture growth in the Irish demographic and some macro backdrop. KBC, the focus there is on the acquisition of the portfolio. It's a back book acquisition, and we're focused on the EUR 9 billion performing mortgage book and about EUR 5 billion of savings. We've entered into an MOU. We're looking to complete both transactions subject to approval and final agreement in the case of KBC in 2022. In terms of what that means for return, our North Star focus in terms of our return on tangible equity continues to be in excess of 10% in the longer term, and that's unchanged. That hasn't been diluted by COVID. Actually that North Star and that target is independent of M&A. Obviously, these two acquisitions will get us beyond to the 10% ROCE. We'll get there sooner. We're not being explicit in terms of timing. We've guided that we'll do a strategy refresh in 2022. Even though we'd have loved to have done that this year, we want to get the conclusion of those two acquisitions to be able to be more explicit in terms of timing and medium-term guidance. Hoping that answers two of your questions. I'll go to Myles on the first. Thanks, Francesca, good morning, Diarmaid. Hope you're well. On guidance, we are guiding that the second half of the year, income will be 5% higher than H1, which essentially equates to, for the full year income being about 9% above 2020. That's a better than expected outcome to where we thought it would have been, say, six months ago. That's driven by strong performance from our corporate business, but also stability in retail Ireland despite the lockdown, and better overall margin experience in the U.K. That lending performance has also supported our participation in TLTRO, which is enhancing income. There's the broad moving parts. We delve into it. Within that 5% overall, if we go to net interest income, expect the second half of the year to be higher by about 5%, was up 2% in the first half of the year. The major moving parts for interest income in the second half of the year are that dynamic of the application of negative rates and lower funding costs, generally offsetting the impact of negative yields on liquid assets and lower structural hedging income. Also importantly, the guidance on interest income is supported by meeting the lending benchmark for TLTRO at December 2021. In relation to business income, fee and commission income up 8% in the 1st half of the year. Underpinning that overall 5% growth in income is an assumption that business income will be up by about 20% in the second half of the year. Much of that is coming from our wealth and insurance business. We have talked before about the opportunity for wealth and insurance, aside from the opportunity from Davy, the organic growth in that business. Much of that 20% uplift is going to come from the wealth and insurance business. Overall we assume no major movement on valuation. They're the major moving items here within guidance. That's great. Thank you very much. Thanks, Diarmaid. Thank you. Your next question comes from the line of Eamonn Hughes from Goodbody. Hi, Francesca. Hi, Myles. Morning. Actually, I might sneak one or two more questions than just the usual one or two. Maybe just in the U.K., clearly massive reversal there in terms of fortunes, and a lot of it's got to be doing with the work you've been doing yourselves in relation to the business. Just kind of trying to get a sense around margin progression into H2. Do you expect the market there to become a little bit more competitive? Certainly NIM was better in H1 than prior guidance. Maybe that's just the first question. Secondly, maybe just staying on the Irish mortgage market share at 23% was probably a little bit lower than expected. Maybe thoughts around H2, what you're seeing in terms of applications. Myles, specifically maybe on NPE flows into NPE, any particular parts of the book that we started to see a deterioration? Maybe Francesca, if I can maybe come back to the ROCE point. I mean, you talked about greater than 10% long term. I know you haven't said anything specifically in relation to the acquisitions in terms of contribution, but pretty material upgrades today, acquisitions flow through. Could we conceptually see that number in 2023? Okay. Thank you, Eamonn. I'll answer the first couple, and I'll give you a short answer on the ROCE, and then go to Myles if you want to add anything more, and then talk about NPE flow. In terms of the U.K., the progress that we're seeing with the 51% increase in operating profit pre-impairment is a reflection of the last three years of transformation of that business model. It is a turnaround for us. We see revenue improving, cost down, and the shift in lending and supporting that, and we're delighted with the results that we're seeing in the U.K. We are driving value as opposed to volume as a result, reducing funding costs and operating costs. Specifically, your question on NIM. NIM is up 29 basis points year-on-year to 1.95% overall. There's a few moving parts in there. Some of that is improved product margin and mix. A step away from the sort of very low LTV, very price competitive remortgage market, and obviously an increase in our new origination of bespoke. We've also lowered our deposit pricing because we need less of it. We see, obviously, base rates flat at 10 basis points. Margin is up across all of our product lines. In terms of the outlook and going into the second half of the year, obviously we would expect more increased competition in the mortgage market. I think we're seeing that with other U.K. banks as well. Our NIM improvement is expected to continue in the second half, but not necessarily at the same rate. We're guiding for an exit NIM of circa 2% for the U.K. overall. That's the first question. The second one on ROA mortgages. Yeah. Our market share for the first half in drawdowns was 23%, and that compares to just over 25% for 2020. There is a reduction. Let me just explain two reasons for that. One is there is a different approach towards how the macro prudential rules are used by competitors. We all have a level of exemption. We spread that over the course of the year. We will see some other competitors use more of their full year exemption in the first quarter, and that's one of the factors. We would think that accounts for sort of ±1% of the market share reduction that we've seen. We expect that to be better in the second half, and our second half traditionally always is stronger than the first half in mortgage business. The second element is just the growth in the broker market, especially in the switcher base, the switcher segment. Broker market, really important, has become increasingly relevant in the Irish market. They're up from 30% participation last year to 40%, and we just see with price competition in that space, we've applied a very disciplined approach. An element of that is the switcher market, which is relatively small for us, but is more active for the broker market. The second half, I'm obviously not going to give guidance on market share per se, but we are investing in our digital platform for mortgages. That's really great non-price differentiation. Continue to do product innovation, and we typically always have a stronger second half to the year. We would feel good about the pipeline of business. Just on the third point, very briefly on ROCE, I'm not giving explicit guidance on when we would be in excess of 10%. Obviously, the two acquisitions are both materially accretive to ROCE. We look forward to those completing and giving an update at our strategy refresh in 2022. Thanks, Francesca. Good morning, Eamonn. On the NPE question, the overall NPE movement fell from EUR 4.5 billion at December 2020, down to EUR 4.1 billion with the EUR 5.7, EUR 5.5. Two major moving parts, the EUR 0.3 billion reduction as a consequence of successfully executing that Irish residential mortgage transaction, and some net inflows of EUR 0.2 billion, predominantly in the corporate space. Nothing really material to call out in relation to those inflows. I suppose overall, we are generally encouraged by the relatively low level of loss from actual loss experience. We saw that throughout the second half of last year, and we have seen it again in the first half of this year. In terms of where NPEs gravitate to, obviously, we continue to apply our successful approach of executing transactions combined with working with our customers for sustainable solutions. As I'm sitting here today thinking about the second half of the year, the area of our focus clearly are those customers right now who continue to avail of government support. Really a careful eye on them, whether they're mortgage customers or whether they are SME customers receiving support from the government, that's our area of focus from an NPE perspective. Of course, mindful that we are holding from a stock of provisions perspective, EUR 229 million at the half year to cover that latent risk. That would be our NPE focus as we progress through H2, Eamonn. Myles, actually, if you don't mind, just a quick follow-up. Just when you mentioned that, I suppose the 229 sitting there presumably gives a good bit of comfort. I know you've kind of talked about reasonably negligible charge for H2, but also as we think about kind of 2022 as well, the traditional normalized impairment numbers in and around 30 basis points. It sounds like you're feeling reasonably good about that print as well, possibly? Yeah. I think we've been clear throughout the COVID crisis to get our arms around the credit risk arising from COVID. I think we did that successfully last year. We are in a relatively benign economic environment, and we are holding that provision, as I say, to protect us against the latent risk from COVID. We'll assess it at the end of the year. There is some sense that possibly as customers come off government support, we might not see the impact until quarter one or possibly quarter two of next year. We'll certainly make that assessment as part of the year-end process and into 2022 then. Okay, Myles. Thanks a million. Thanks, Francesca. Thank you, Eamonn. Thank you. Your next question comes from the line of Christopher Mayock from Autonomous. Good morning. Both, thanks for taking my questions. Two, please, if I could. The first on cost. Obviously you've reiterated the circa EUR 1.5 billion for 2023. Just thinking about your 1H print and the EUR 1.65 billion for this year, I think that implies EUR 800 million-ish, maybe a touch above that in second half. Which I guess looking into 2022, just annualizing and allowing for that momentum that you've been building up on cost, I guess your operating cost number ex-levies for 2022 is sub EUR 1.6 billion. Is that fair? Accepting that M&A will then have an impact as and when those transactions close. Pre that, is that how we should be thinking about 2022? I think consensus is at more like EUR 1.65 billion for next year ex-levies. Then the second on provisions, please. Just thinking about your opening remarks about the strength of the macro recovery. It looks to me like the macro inputs to your IFRS 9 models are lagging quite a bit, where consensus macro expectations would be for 2021 in particular, thinking about GDP is better than you have in, unemployment would be better than you have in on a weighted basis. I think house price inflation is already running ahead of what you've got in for this year on a weighted basis. If you were to mark to market now, what would that do to your provision position, please? I'm guessing your second half guidance when you said broadly stable, that's predicated on no change to your macro inputs, I presume. If you were to change your macro inputs to align with consensus, how should we think about the scale of the release there, please? Thank you. Thank you, Chris. I'll answer the cost question. Made very good progress. We're happy with where we're going. Our guidance is unchanged, as you know, for 2021 to be sub EUR 1.65 billion. In terms of your extrapolation into 2022, I just encourage you to assume linear run rate in terms of that continued cost reduction. Our guidance to be at a cost base of EUR 1.5 billion by 2023, we reiterate. Obviously, that target and those numbers are based on the existing business model. We set them before we would have been in the process of the acquisitions of Davy and KBC. What is good about that is the KBC portfolio is a back book portfolio with marginal additional costs coming with the portfolio, so when we do complete. Obviously, Davy is a revenue acquisition but has a relatively smaller cost base, very much people driven and very much a people business. That's what we're acquiring. That's just an extra element there. I know you're asking more for guidance on 2022, but just wanted to give that context also. I'll pass to Myles on IFRS 9. Sure. Good morning, Chris. You are right, there's a range of new forecasts on the macroeconomic assumptions have come out, and you'll appreciate as part of our H1 process, we go to print at a certain point in time to deploy those assumptions into our credit models. I suppose as I think about it, a couple of thoughts. One is when we use macroeconomic forecasts to drive the EL charge, we do so over a multi-year basis. Even though the in year forecast may be more optimistic, it may not be as pronounced as you would think in terms of the EL charge because we forecast over three years. Having said that, it is fair to say that the outlook is improving, and particularly for Bank of Ireland's balance sheet. I mean, GDP is a good headline indicator, but the two that really I thought influence our EL charge is unemployment and property prices. Frankly, I take your point that property prices are looking more favorable than, say, they would have been four to six weeks ago. In terms of the impact, we do make some helpful disclosure, I think, as part of an appendix, slide 44 and 45, and they set out some decent parameters to work out how the EL charge could move as a consequence of different economic scenarios. Maybe just to give you some examples of that. For example, if we were to gravitate a charge to our upside scenario, which accounts for 20% of our overall weighting, that would improve the loan loss allowance by EUR 222 million. To take your point on residential property prices, if the property price is increased, let's say 10% above our forecast, that would improve the loss experience by EUR 33 million, about an 8% impact. Hopefully, that gives you a sense of the ranges. I'd say those disclosures do give helpful parameters to plot the EL charge across a range of different scenarios. Thanks. That's really helpful. If I could just clarify on the cost question. I think you were in agreement there in terms of the momentum. Did you say, Francesca, that you'd expect to be kind of straight lining the cost progress, linearly running that cost progress down to 1.5 in 2023 as we look through 2022? Which I think would get you to the same conclusion, sub 1.6x. Yes. M&A, ex levies next year. Yeah, sorry, Chris. Cut across you. Yes. Year-on-year. Yes. Okay, that's clear. Thank you. Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, please press the star and one on your telephone keypad. That's the star and one for any questions. Your next question comes from the line of Sangeeta Pandya from UBS. Good morning. Thank you for taking my question. I wanted to ask about the additional balance sheet optimization initiatives that you've mentioned for the second half. Could you please provide more detail on those? Thank you. Sure. Thank you, Sangeeta. I'll go to Myles on additional balance sheet optimization for the second half. Yes, happy to. Good morning. There's a range of optimization initiatives that we have good track record in executing and underpin that activity in the second half of the year. The first is in relation to a credit risk transfer. We've done a few of those. You'll appreciate I won't share the commercial element of that today, but they do offer our ability to share some of the risk on our balance sheet, which offers relief in capital. Also just generally, with the benefit of having New Ireland Assurance as a subsidiary, there's an ability for us to optimize our capital position between the subsidiary and between the group. They will be the two main interventions that I expect will have a material impact on capital in the second half of the year, and in particular, are supportive relating to the execution of the two inorganic opportunities which we have at the moment. Sure. Just a clarification, these measures are inbuilt in the 30 basis points-50 basis points incremental ratio number? No, they are not. They are incremental to the 30 basis points-50 basis points. Understood. Thank you. Thank you. Thank you, Sangeeta. Thank you. We have a further question from the line of Eamonn Hughes from Goodbody. Sorry to jump in again, Francesca and Myles. Maybe just two things. Myles, can I pick up on just back to the slide around the IFRS 9 adjustments, the EUR 172 from the model parameters. Can you just go again through the reasoning behind that for me? Then secondly, just in terms of new business flow, I know I kind of asked a question around mortgage activity, but just what are you seeing on the ground on the SME side in particular? We know the drawdowns from the COVID guarantee scheme are pretty weak still, I suppose, what are you seeing yourselves over the summer in terms of applications and interest and activity? I suppose, is that giving you a little bit more hope in relation to and supportive of your more optimistic stance around H2? Thanks, Eamonn. I'll talk about on the ground business banking and then Myles will respond on the impairment question. New term lending in the first half was EUR 1.2 billion to the Irish business banking sector. That's 8% up year-on-year, it is 5% below where we were in the first half of 2019. With a strong finish in the fourth quarter of last year, we've just seen a slight slowdown in appetite to draw down at the beginning of the first half, particularly just because restrictions came back in. I would say three key sort of broad themes here. One is we're seeing a lot of SMEs notice, obviously, rising costs. That's a reality for three out of the five firms that we would survey. Some of that pent-up demand, some of it supply chain disruption, but it is a reality that it is impacting on some sectors' appetite for new borrowing. Second is Brexit disruption still exists, but most firms are increasingly adapting to that change, which is positive. The third is that sentiment and appetite to borrow really varies by sector. It's worth well, you know the 58% of SMEs came into COVID debt-free, in terms of sectors that we are seeing with appetite, hopefully tech, media, telco appetite remains high. We see good volumes and good pipelines for the second half. In contrast, hospitality has been low the first half, and we see limited opportunities in the second half just because of the sector's risk profile, but also uncertainty. One sector that we know has been under leveraged, but we're just seeing improvement, is on agriculture. We've seen that just very recently, a notable increase. The last month is 5% up year on year. Drawdowns up 23% of previously approved, and we'd expect growth in that part of the SME market in the second half. Hopefully that's given you a bit of a flavor of what we're hearing and seeing on the ground. Eamonn, on the follow-up question relating to the IFRS 9 charge. Just to frame the response, an overall charge of EUR 1 million at the highest level, a model charge of EUR 9 million, and EUR 8 million write back on the group management adjustment, and an overall net zero on actual loan loss experience. Within that EUR 9 million model charge, there are two major components. The first is recognizing the improved economic outlook. There is a write back of EUR 163 million. Then offsetting that, we have applied what I would describe as a model-driven P&L charge of EUR 172 million in H1, primarily through increasing our coverage on non-performing Irish and U.K. mortgages. That has the impact of increasing the NPE coverage on mortgages from 22% to 27%. I would describe that intervention as really not being reflective of any actual experience on the ground. It is a prudent intervention, which includes the application of LGD floors, and a more cautious assumption on long dated arrears. All of that, of course, in the context, if you look at our mortgage portfolio, we have EUR 2 billion sitting in the NPE portfolio. Back to that point around a dual track approach of progressing with transactions, but also working on sustainable solutions. It's a cautious intervention, just to protect against any future downside that may arise from that portfolio. No more than that. That's great. That's very helpful. Thank you both. Thanks, Eamonn. Thank you. The next question comes from the line of Diarmaid Sheridan from Davy. Thank you. Apologies for following up. Maybe I just missed this. Apologies. Just in terms of the cost piece and your guidance, just wonder around the cost to achieve that. I think consensus is just maybe slightly short of EUR 160 million of exceptional items for this year. Is that kind of appropriate? Should we see that then decrease beyond that in the coming years? Then just secondly, just around risk-weighted assets and mindful, Myles, of the comments that you made about credit risk transfers, but just around the organic side, how should we look at kind of migration of risk-weighted assets? Obviously, the mortgage portfolio has decreased in Ireland somewhat, but if we look at the general credit risk-weighted asset, how should we think about that going forward? Thank you. Yes. Very happy to, Diarmaid. In relation to the risk-weighted asset profile, overall the density has unchanged, with a reduction in the mortgage portfolio down 1%, and that's predominantly as a consequence of the NPE transaction. Also, you've heard me say this before, every year we do front book lending on mortgages. The overall risk weight profile improves as a consequence of writing new business at lower risk weights. Linked to my comments earlier from having a strong performance in the corporate book, by their nature, they come with higher risk weights, so that's been a factor overall to result in a stable risk-weighted asset profile. When I gave the guidance in relation to capital being between 30 and 50 basis points higher in the second half of the year, compared to H1, I've captured what I see as being the loan investment, if I can call it that, the increase in risk weights or increase in lending to accommodate that profile. In relation to cost, I think the point really is that we remain within our EUR 1.4 billion transformation budget to deliver on taking the cost base to below EUR 1.65 billion. Of course, that's incremental to the other benefits from the transformation program that Francesca has spoken about. To take the cost base to EUR 1.5 billion does require further investment, and there will be an element of that this year, and indeed some more as we work our way towards 2023 to get to that lower run rate cost of EUR 1.5 billion. We're not giving precise guidance on that today, Diarmaid, but we will update the market on that in due course, and particularly as part of our strategy update expected in 2022. That's great. Thank you. Thanks, Diarmaid. Thank you. Your next question comes from the line of Marta Romero from Bank of America. Thank you very much. Good morning. Most of my questions have been answered, so I just want to understand your views on whether you have any hope about the central bank recalibrating the LTI limits, and whether that is a bit constrained on your lending capability, and if you can share how much demand you're not being able to meet on the basis of LTI restrictions. Thank you. Thank you, Marta, for the question. We're not baking into our guidance or our outlook, any change in the macro-prudential rules that exist in Ireland. We operate, obviously, within them. We spread out the exemption limit that we would have, the exceptions limit, through the course of the year, which obviously does impact some of our relative trading in the first half versus the second half. Could we do more mortgage business if those rules were lifted? I think the entire market could. The extent to which that would be necessarily sustainable or be challenging some of the price inflation that we see is quite high in Ireland, I think is where the debate is. I'm not working on the basis that's going to change anytime soon. Our focus is on increasing the supply of home building as well as buying, and that whole supply and demand issue continues to put pressure on prices, but also gives opportunity, over time, for increased mortgage lending. That's where our focus is. I wouldn't bake that into your outlook. Yeah. May I just add to that the single biggest driver for the mortgage balance sheet for Bank of Ireland will be the growing mortgage market driven by increased housing outputs. We are clearly conscious of house price increases and the impact that may have on affordability. It is good to see that much of the new homes that are being built are biased towards affordability. That growth in the mortgage market will continue to be a positive for the Bank of Ireland balance sheet. Thank you very much. Thanks, Marta. Thank you. The next question comes from the line of Aman Rakkar from Barclays. Morning, Francesca. Morning, Myles. Hi, Aman. Morning. Morning. I guess most of the questions seem that have been asked. Sorry, I've come to this call a touch late. Forgive me if I'm asking something that's already been addressed. No problem. Could I just get the sense around capital distribution potential at full year and the mix between buyback and ordinary. I guess, when you're trading below book, the buyback kind of is perhaps a bit more attractive at these levels. I know the quantum of capital return is dependent on a few bits and pieces, but is there a higher propensity to do a buyback now versus an ordinary, and how do you manage that balance between the two? Second question was around the regulators, the authorities more broadly. To the extent that you're able to comment, have you noticed any kind of change in the rhetoric or tone in regards to the kind of conversations that you're having with various authorities? I guess I'm thinking particularly in light of the various exits in the system. Hopefully, is there a sense of pragmatism, perhaps, that we're sensing now that perhaps wasn't there before? Okay. Just in terms of capital distribution, obviously, I don't know if you heard the response at the beginning. Just reiterating our understanding and support of the importance of distributions to shareholders. We've obviously got a strong capital position today, and we've given guidance on positive future accretion that will support recommencement of distribution. We'll do that on a pretty progressive basis based on performance and outlook. In terms of the mix between, in the future, share buybacks or dividends, we're not being explicit in terms of timing or amount or constructs of distribution. Obviously, our strong capital position coincides with two exceptional and rare acquisition opportunities. We'll provide more clarity as part of the year-end process in terms of distribution, and how they could look. In terms of the second question, just on regulatory authorities, we continue to have a constructive professional level of engagement. Has there been a total change or even a material change given news of NatWest and KBC? No. To be fair, I think when we think about the regulatory agenda, more medium term, obviously it continues to evolve. It's very much focused on business model sustainability. I think that's not specific to Ireland. It is a European regulatory focus. Obviously you've got emerging risks around whether that's climate and cyber becoming more relevant parts or more important parts of the regulatory agenda. In terms of immediate reaction, no. Okay. Thank you very much. Thanks, Aman. Thanks, Aman. Thank you. Next question comes from the line of Guy Stebbings from Exane BNP Paribas. Morning. A bit like Aman, I joined the conference slightly late, hopefully I'm not being too repetitive with my questions. Firstly, just one briefly back on capital and distributions and then one on margins. On capital, obviously strategic, there's a lot of actions going on which are going to absorb capital. Just wondering if you could talk about the trade-off there between those actions and restarting distributions. I guess the capital balance has given a lot more headroom than we might have expected. Just in terms of sizing any sort of capacity thereafter the distributions, should we be thinking kind of pro forma for those acquisitions, you might want to run with a bit of extra headroom because of executional risk around them? Is that not really a concern and actually, pro forma for those actions, you're going to be more capital generative, so if anything, you'd be more happy to operate with lower capital headroom. Then on margin, some quite favorable dynamics in the period helping to offset some of the headwinds. Could you remind us where we are on the application of negative rates and how much further support that could provide going forward? Thank you. Sure. Thank you, Guy. Those questions haven't been asked before, so it's not at all repetitive. Just on capital distribution, let me just say a few words, and Myles may want to add before we get onto margin and negative interest rates. In ordinary times, any capital in excess of our requirements would be prioritized for distribution back to shareholders. Like I said to Aman's question, in the form of a dividend or in a share buyback. Obviously our strong capital position today coincides with two exceptional and rare acquisition opportunities, where we feel that we will create more value for our shareholders and in turn the ability to increase distribution over time because they are accretive to ROCE. It's not binary. It's not as if we distribute or we do M&A. It's not a binary choice of one or the other. We do obviously prioritize where we will see the maximum optimization of shareholder returns, which, sitting here today, those two M&A opportunities we see as very accretive. Myles may want to add. Just to that point, we've said it before, we really understand the importance of distributions to our shareholders. We're very comfortable with the statement that we want to recommence distributions. Right now, sitting here today, our focus clearly is on these two very important inorganic opportunities that represent, to my mind, a step change in performance and return, and therefore by definition, value to shareholders. We do look forward to having that discussion with the board in relation to the recommencement of distributions at the right time. In relation to margins and negative rates, I suppose the factors that determine our margins are really unchanged. Maintaining strong pricing discipline in Ireland, improving margins in the U.K. through examples of the bespoke mortgage, but also importantly, lower spot funding costs. Also the management actions, and your point on negative rates that we're taking. The interventions on lower funding costs and applying negative rates to corporate customers is essentially offsetting the impact of negative yielding liquid assets and lower income from structural hedging. I see that dynamic continuing. When I think about your precise question on negative rates, we applied negative rates to EUR 8.5 billion of deposits at the half year, which generated income of EUR 30 million. I expect that application to increase to about EUR 15 billion of deposits. When you annualize the EUR 30 million plus that additional expansion, we are looking at income in the region of EUR 70 million-EUR 80 million for the full year. A very positive and material intervention. That's driven by essentially reducing the threshold from in the region of EUR 2.5 million down to EUR 1 million. That'll play out over the course of the second half of the year. Okay. Thank you very much. Very helpful. Thanks, Guy. Thanks, Guy. Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, press star one on your telephone keypad. The next question comes from the line of Christopher Mayock from Autonomous. Hello again. I thought I'd ask one more, if that's okay. I understand you don't want to talk about the expected financial impact of the M&A transactions, but just in terms of helping us think about a couple of points. I guess firstly on the KBC transaction, when I look at KBC's risk-weighted asset disclosure for KBC Ireland, they appear to have quite a large add-on in terms of the mortgage risk weight. It looks to be a very risk-heavy book on KBC's balance sheet. Could I just check, I don't think you're assuming that that's going to come across, but should we be thinking about something of the order of EUR 4 billion-EUR 4.5 billion of RWAs for that book on your balance sheet? Secondly, on Davy. I guess one of the concerns people might have with this transaction, given the events which sort of preceded Davy being up for sale. How are you thinking about any legal risk that you're taking on with that business? Are you indemnified against that? Is that part of the contingent consideration? Have you reached agreement or will you seek to reach agreement with regulators in relation to historical conduct matters? Just because the multiple does look quite high to me. I understand why you view it as strategically attractive, but it does look like quite a high multiple that you're paying. I guess if you're paying that and taking on legal risk, that would be a further negative in my mind. Thanks. Thanks, Chris. I'll answer Davy, go to Myles on KBC RWAs. Obviously, by virtue of the fact that we have reached a decision to acquire Davy, kind of reflects the level of comfort we've got around both the risks and opportunities. Obviously there was a very specific incident that resulted in the regulatory finding. As you'd imagine, we've undertaken robust due diligence as part of the process. We're satisfied with our assessment of the business, we have a good understanding of the risks and opportunities, it's a business that we know well. I'm not going to go into sort of the details of the construct of the consideration, other than what we put in the RNS. We feel it strikes the right balance between creating value and also protecting and having conditions going forward that will make it a successful acquisition in addition to the Bank of Ireland Group. That has been well considered within our consideration structure. I'll go to Myles on RWAs. Yeah. Chris, I think your maths is about right in relation to the risk weights for KBC. Well, we assume that they come across essentially at standardized risk weights, plus of course, allowance for op risks. I think where you've got to is about right. I should say as well, taking them in at standardized does offer the opportunity over time to migrate those mortgages to IRB, which would represent further upside down the line. Thank you. Very clear. Thanks, Chris. Thank you. We have no further questions at this time, if you wish to continue. Okay. I think we’ve answered all the questions. I know the investor relations team will be in touch if there are any other queries, and we have a call later in the week. Thank you very much for your time and attention this morning and appreciate the engagement. Thank you. Thank you very much. Have a good morning. Thank you. Thank you.