The AIB Discussion Thread

fan_by

think AIB and BIO might follow Anglo or hit the ground as property keeps falling, just have to wait for foreclosures to rise as foreigners leaving state and leaving no hope for loan repayments for thouse who heavyly invested in property

Heraldoffreeent

pocketdooz wrote: »

So real investors stay away form this stock and gamblers lap it up - hence proving the point.



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All it proves is that two sets of investors take diametrically opposing views on your "fundementals".

woodseb

pocketdooz

Heraldoffreeent wrote: »

All it proves is that two sets of investors take diametrically opposing views on your "fundementals".

I'd love to see you try and explain yourself clearly.


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Time Magazine

woodseb wrote: »

And our GDP is a bad denominator - it'd look even worse if we used GNP.

Lplated

woodseb wrote: »

For Ireland's liabilities to be 8 times our GDP, it must be including the bank guarantee scheme. If the basis of the chart is potential as well as actual liabilities, why does it show America's liabilities at only 100% of GDP?? Methinks there is a bias in what is counted as a liability.

wyndham

Ireland to take on $31 bln in bank risk-report

DUBLIN, Feb 1 (Reuters) - The Irish government is to invest 7 billion euros in Allied Irish Banks and Bank of Ireland, and is in talks to insure them against potential losses on up to 24 billion euros ($30.84 billion) in property loans, The Sunday Times newspaper reported.

Without citing any sources, the newspaper said the recapitalisation scheme would be announced this week.

The top two banks will each receive 3.5 billion euros from the state in return for preference shares, which will carry an interest rate of 8 percent, providing an annual payment of 560 million euros.

No one from the Department of Finance or Bank of Ireland was immediately available to comment.

A spokeswoman for Allied Irish Banks (AIB) said the report was 'speculation' and declined to comment.

The Sunday Times said the government was considering transferring the risk attached to 80 percent of the value of property-related loans on the banks' books to taxpayers.

The insurance scheme under consideration will cover outstanding loans on development land and on part-completed construction projects.

AIB and Bank of Ireland are believed to have in the region of 37 billion euros in speculative property loans on their books, the newspaper reported.

Under the scheme being considered, if any of those loans have to be written off, the state will pick up the bill for 80 percent of the insured amount and the bank will bear the rest of the cost.

The government said in December it would invest 2 billion euros in each of AIB and Bank of Ireland via preference shares in the first quarter of 2009 and would underwrite plans by each of the banks to raise 1 billion euros before the end of March.

But the banks' shares have been buffeted by the fallout from the nationalisation of No. 3 lender Anglo Irish Bank last month making it difficult for them to tap investors for funds.

The government said last year it would invest up to 10 billion euros to recapitalise the banking sector, which has run afoul of the global credit crisis and heavy exposure to a crumbling property market at home.

Mr Benevolent

In other words, we're fecked.

wyndham

wyndham wrote: »

Under the scheme being considered, if any of those loans have to be written off, the state will pick up the bill for 80 percent of the insured amount and the bank will bear the rest of the cost.

I don't know, sounds like pretty sweet deal from the banks point of view?

Qwertysurf

good time to buy shares?

-mr.x-

people are saying not to invest in AIB or BOI.
i wouldnt agree with this, i mean the banks are getting a great deal from the government.
AIB and BOI are very strong organisations, sure they a have a great deal of loans that may not be paid back but the banks when they recieve the governments money will almost certainlly be able to funtion much better and this will cause the share price to rise.
The banks are still making huge profits and are clearly very important to the economy, there problem is that they dont have much capital and the idea is when they get capital from the government there lending will increase and as a result will be back on track.
AIB and BOI share priced is so low because of fear and interpertation, they are not priced on the banks profits.

daveirl

This post has been deleted.

woodseb

-mr.x- wrote: »

people are saying not to invest in AIB or BOI.
i wouldnt agree with this, i mean the banks are getting a great deal from the government.

AIB and BOI share priced is so low because of fear and interpertation, they are not priced on the banks profits.

what's your interpretation of the bank's profits going forward then, bearing in mind the slowing economy and paying the government half a billion each year in preference coupons?

-mr.x-

the banks may lose a lot of money in the next two years because they were greedy and decided to give out very risky loans.
my point is that the banks are getting a chance to start again with the two Bn in capital they will get from the government.
the banks have a reserve ratio in other words when someone lodges 100 euro in say AIB, the bank is then aloud to give out 1000 euro in loans which in a way the bank is giving money that isnt there.
so when the bank is given 2BN it can give out 20BN in loans which makes the bank well capitalised.
so basically as long as people continue to support these banks they will certainlly make it through this sh1t storm.

Dob74

Personally i would prefer to see the gov give a tax break to paye workers than give it to the Banks. The banks have failed, so why give them more money. Success should be rewarded not failure.
If the gov gives money to the banks, senior exec most take a pay cut. All pay should be a max of 100k. If they dont like it they can get a job with lehmen brothers. Banks have to write down there bad loans. If this does not happen we will never reach the bottom. We wont be able to grow again until we face up to all the mistakes that have been made.

Time Magazine

Dob74 wrote: »

If the gov gives money to the banks, senior exec most take a pay cut. All pay should be a max of 100k.

See the top brass leave, hire mediocre managers who are pally with their TD, and risk tens of billions of euro.

Great plan.

Berti Vogts

The Economist wrote: »

See the top brass leave, hire mediocre managers who are pally with their TD, and risk tens of billions of euro.

Great plan.

What a shame it would be to see "the top brass" leave. As if tens of billions of euro haven't already been risked?

Dob74

The Economist wrote: »

See the top brass leave, hire mediocre managers who are pally with their TD, and risk tens of billions of euro.

Great plan.

Not a penny of taxpayers money should be given to the banks. The top brass has failed. These failures should not be bailed out be the gov.

Time Magazine

Possibilities wrote: »

What a shame it would be to see "the top brass" leave. As if tens of billions of euro haven't already been risked?

Sorry, I should have clarified that I think the senior execs of any company that needs a bail-out should be tossed out on their arses without any nice pay-offs. However there are different levels of risk - restricting replacement chief execs' pay to €100k increases the chance of not getting the best man for the job, which increases the level of risk.

Dob74 wrote: »

Not a penny of taxpayers money should be given to the banks. The top brass has failed. These failures should not be bailed out be the gov.

I agree. That said, if nationalisation is going to be done, don't do it badly.

wyndham

From RTE:

A new recapitalisation plan for Bank of Ireland and AIB is set to be announced early this week. The injection will involve much bigger sums than originally planned when recapitalisation was announced in December. A figure of €8 billion is expected to be announced either tomorrow or on Wednesday. It will include an injection of more funds, and State insurance against bad property debts.

hblock21

wyndham wrote: »

From RTE:

A new recapitalisation plan for Bank of Ireland and AIB is set to be announced early this week. The injection will involve much bigger sums than originally planned when recapitalisation was announced in December. A figure of €8 billion is expected to be announced either tomorrow or on Wednesday. It will include an injection of more funds, and State insurance against bad property debts.

Would shares be expected to rise if this is true? I know its a guess, but if you were to???

Feyy

Yeah they should rise, it would shore up some sense of "hope" again for the banks.

nulabert

or they may fall as the government is interfering with the free market? They closed up 10cents to 132cent.

Heraldoffreeent

Feyy wrote: »

Yeah they should rise, it would shore up some sense of "hope" again for the banks.

In theory you are corect, however Obama's plan didnt have this effect in the states.

ranger4

Are we likely to have a statement from the gov by this fridays close of markets with regard to the recap of aib-boi, will we likely hear of bad debt insurace allong with cash injection.

pocketdooz

Here is some research for anyone who is actually serious about looking at the Irish Banks

Attached.




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ranger4

pocketdooz wrote: »

Here is some research for anyone who is actually serious about looking at the Irish Banks

Attached.




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Interesting reading, thanks.

ranger4

With the moodys downgrade with irish bank debt from stable to neg this afternoon surley the gov will shortly announce details with recap.

-mr.x-

its hard to no if people are going to take the recap well, i hope they will:rolleyes:

ranger4

-mr.x- wrote: »

its hard to no if people are going to take the recap well, i hope they will:rolleyes:

I guess it depends on the detail, will the recap also include some sort of bad debt insurance etc, would think that this would be seen as possitive by the markets, We will hear soon possibly over weekend, the us are releasing their bank recovery plan next monday so i am guessing we should know of our gov plan by then.