`New Credit Card Offers Not What They Seem,'' Says Bank of Ireland.

Business Editors

DUBLIN, Ireland--(BUSINESS WIRE)--June 1, 2000

John Collins, Chief Executive Retail Businesses, Bank of Ireland (NYSE: IRE) has issued the following statement in response to the launch of a credit card offering by Tesco and the suggestion that the Prudential subsidiary, Egg, may follow suit:

"Publicity surrounding the launch of the Tesco card and, indeed, earlier offerings from MBNA, suggests that the interest rates on these cards are substantially below the rates offered by Bank of Ireland and other established players in the Irish Credit Card market and that they pose a serious threat to the Bank's lending margins. This is not the case.

"Tesco is indeed offering a low introductory rate for balances transferred to them from other card issuers -- but that rate is only available until January 2001. After that date, the rate will be set at either 15.9% or 16.9% - higher than the best Credit Card rate available from Bank of Ireland, which is 12.9%. In addition, Tesco, in common with some other issuers, charges penalties which do not apply in Bank of Ireland, such as (pound)12 for late payment and (pound)12 for exceeding the credit limit.

"MBNA, which has made many claims about the relative value of its card offering, currently charges 17.9% and 18.9% -- similar to the highest rates from other major issuers and, in addition, levies a range of penalties which do not apply in Bank of Ireland.

"Market conditions, customer behaviour patterns and the relatively low penetration of credit cards dictate the rates that must be charged in the Irish Credit Card market in order to earn a reasonable return and Bank of Ireland believes its offering is very competitive in the context of the market conditions which prevail. Despite the entry to the market by new competitors and competitor claims about relative value, Bank of Ireland increased its credit card customer base by 25% in the year to March 31, 2000.

"Interest earning credit card balances, at euro190 million, represent 0.4% of earning assets in Bank of Ireland. It is a small, but important niche product within the wide range of retail banking products that we offer. We are confident that we will hold and increase our market share and that our pricing will never be out of line for any material period of time with competitors."

In addition to its US listing (NYSE: IRE), Bank of Ireland ordinary shares trade on the Irish Stock Exchange and the London Stock Exchange and prices may be accessed on Bloomberg under the symbol BKIR ID, on the Reuters Equities 2000 Service under BKIR.I, and on Quotron under the symbol BKIRU.EU. Additional information is available on Bank of Ireland's home page: http://www.bankofireland.ie