On 03 July 2009, the Governor and Company of the Bank of Ireland (Bank of Ireland) issued an interim statement, in which Management reiterated its previous guidance for impairment charges through FY 2011. Management also raised concerns about weak demand for credit and a decline in margins due to rising funding costs. We are concerned about the impact these trends will have on the firm's bottom-line, although we are encouraged by ongoing efforts to cut costs. In light of this, we believe the recent sharp sell-off has exhausted the company's fundamental downside potential over our 6-12 month investment horizon. Therefore, we upgrade the common stock from a SELL to a HOLD. We will reassess our rating after the company announces its 1H 10 results. Although we continue to anticipate a significant positive currency impact on the ADR (1 ADR = 4 common shares) over the coming 6-12 months, we maintain our HOLD rating based on our fundamental outlook. We will reassess our ADR rating after the company announces its 1H 10 results.

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