Bank of Ireland shares

NickSantigo

Harpon wrote: »

I’d disagree with most of that. There has been negative rates for a long time now, didn’t stop them making 800 million odd euro a year or so ago.
Banking is not competitive in Ireland at all, there is a duopoly between BOI and AIB. With them being able to charge 2.5 percent or more on mortgages here, there was supposed to be a wave of competitors coming to get a slice of the action, it never happened, so no chance of it happening anytime soon now.
Banks are reducing their headcount by massive amounts in the past few years, eventually that will show up in increased margins in a few years time. Example, I applied online for a loan with aib and 5 minutes after starting the application the money was in my account........imagine how many paper pushers would of been involved in that transaction years ago.
I’d also choose AIB over BOI due to their reduced exposure to brexit.

What about PTSB, KBC Ulsterbank and EBS?
Credit Unions are looking to get into mortgages too.
You have a lot of competition for mortgages
Lots of customers still have tracker mortgages too which the banks would love them to give up.
Years ago you would get your mortgage, set it and forget it. Nowadays it has never been easier to switch mortgage provider, with Ulsterbank for example paying 1500 towards your legal fees.
It's a race to the bottom.

Car companies are offering 0% finance or at the very least a rate like 3.9% which is much lower than what a bank is currently offering.
Credit Unions also offer further competition here.

A likely recession will reduce the demand for loans and those that have loans may have trouble covering their debt.

I'm not saying BOI will never turn good again, in all likelihood BOI will, it's just you could be waiting a very long time for that day. As I said in my original post there are a lot of better, safer investments out there at present

Shedite27

Harpon wrote: »

I’d disagree with most of that. There has been negative rates for a long time now, didn’t stop them making 800 million odd euro a year or so ago.

They made €758 last year, €935m the year before, €1,078m the year before that. What hope have they of stopping that trend? I've a family member working in the bank and have heard nothing to suggest they can stop that trend

Harpon wrote: »

Banking is not competitive in Ireland at all, there is a duopoly between BOI and AIB.

Banking is not competitive? Anyone under 40 is using Revolut now, BOI's customer base is dying off.

Harpon wrote: »

With them being able to charge 2.5 percent or more on mortgages here, there was supposed to be a wave of competitors coming to get a slice of the action, it never happened, so no chance of it happening anytime soon now.

2.5% and they can't find enough takers. The gap between Deposits and Loans is growing for them (compare Loans V Deposits), and with negative interest rates they lose money on any gap. The bigger that gap, the more the loss.

I'm not meaning to pick apart your point of view, but it's a company I researched myself recently, and the numbers are pretty worrying. I'm just sharing my "research"

Mad_maxx

Harpon wrote: »

I’d disagree with most of that. There has been negative rates for a long time now, didn’t stop them making 800 million odd euro a year or so ago.
Banking is not competitive in Ireland at all, there is a duopoly between BOI and AIB. With them being able to charge 2.5 percent or more on mortgages here, there was supposed to be a wave of competitors coming to get a slice of the action, it never happened, so no chance of it happening anytime soon now.
Banks are reducing their headcount by massive amounts in the past few years, eventually that will show up in increased margins in a few years time. Example, I applied online for a loan with aib and 5 minutes after starting the application the money was in my account........imagine how many paper pushers would of been involved in that transaction years ago.
I’d also choose AIB over BOI due to their reduced exposure to brexit and better balance sheet.

you cant repossess a property in this country like in other countries , its an altogether abnormal situation , that banks here charge higher interest rates is a reflection of this anomaly

banking is a sh1t business in this country

BnB

Shedite27 wrote: »

They made €758 last year, €935m the year before, €1,078m the year before that. What hope have they of stopping that trend?

When you look into the figures there is still a lot positive about the results that were posted for 2019.

The loan book increased for the 2nd year in a row
New loans increased by 3 %
Costs Reduced
Non-performing loans reduced

Plus.... While profits were down, they still did make a very sizable profit

Shedite27 wrote: »

Banking is not competitive? Anyone under 40 is using Revolut now, BOI's customer base is dying off.

There are plenty of people or all ages (including under 40s) who still use BOI and AIB for their primary banking needs.

However, having said that, Revolut and similar offerings are certainly a big worry to BOI and would probably be my biggest worry RE investing in them. Especially if they start offering loans on a more serious level and get into the mortgage market.

sk8board

The current share price is clearly being manipulated, when you see the names of who is accumulating.
It has a market cap of just €1.45bn, is still a pillar bank, a profitable business however you measure it and is sitting on 5-6 times it’s mar cap in assets.

Ireland also has the benefit of geography when it comes to covid recovery.

If you’re buying this afternoon at €1.30 (all time lows, including financial recession lows, which I think was about €2.05 on post 30-1 basis) and switching off the TV for the next 2+ years, you probably have little to worry about.

If you’re a day trader or looking for a pop in the next few weeks, you may be disappointed.

I bought yesterday and am now at €1.35 average. Wake me up in a few years.

BnB

sk8board wrote: »

The current share price is clearly being manipulated, when you see the names of who is accumulating.
It has a market cap of just €1.45bn, is still a pillar bank, a profitable business however you measure it and is sitting on 5-6 times it’s mar cap in assets.

Ireland also has the benefit of geography when it comes to covid recovery.

If you’re buying this afternoon at €1.30 (all time lows, including financial recession lows, which I think was about €2.05 on post 30-1 basis) and switching off the TV for the next 2+ years, you probably have little to worry about.

If you’re a day trader or looking for a pop in the next few weeks, you may be disappointed.

I bought yesterday and am now at €1.35 average. Wake me up in a few years.

Thanks - I wouldn't looking for a quick buck. If I was buying, it would be with money that I can afford to do without for a few years.

Jim2007

sk8board wrote: »

I bought yesterday and am now at €1.35 average. Wake me up in a few years.

None of the bankings shares have recovered since the last recession, because the basic economics of banking has changed.

Back in 2005/6, UBS traded at in or around 75/85 CHF and Credit Suisse at around 40/50 CHF. At the time these were among the score or so banks in Europe with double digit T1 and strong profit margins. They were typically to be found in most Europe pension funds and still are. They both recovered their T1s and rebuild their AUM etc... but they never got the profit margins back and consequently the share prices have been hovering around 9 - 15 range for UBS and 7 - 11 for CS over the past 10 or 12 years.

Banks are not going to start making serious money again until there is a consolidation and they are in a position to stop giving away their services for free.

Harpon

NickSantigo wrote: »

What about PTSB, KBC Ulsterbank and EBS?
Credit Unions are looking to get into mortgages too.
You have a lot of competition for mortgages
Lots of customers still have tracker mortgages too which the banks would love them to give up.
Years ago you would get your mortgage, set it and forget it. Nowadays it has never been easier to switch mortgage provider, with Ulsterbank for example paying 1500 towards your legal fees.
It's a race to the bottom.

Car companies are offering 0% finance or at the very least a rate like 3.9% which is much lower than what a bank is currently offering.
Credit Unions also offer further competition here.

A likely recession will reduce the demand for loans and those that have loans may have trouble covering their debt.

I'm not saying BOI will never turn good again, in all likelihood BOI will, it's just you could be waiting a very long time for that day. As I said in my original post there are a lot of better, safer investments out there at present

Ebs is owned by aib.
Credit unions have abandoned plans to get into mortgages, no chance of it happening anytime soon.
Irish people don’t switch mortgages, it’s about 15% a year. Whether it’s laziness or financial illiteracy I don’t know, but banks take full advantage of this and it’s the reason we have one of the highest mortgage rates in Europe.
I know their will be tons of defaults on loans, but this has been more than baked into the share prices of Boi and Aib.

Harpon

Shedite27 wrote: »

They made €758 last year, €935m the year before, €1,078m the year before that. What hope have they of stopping that trend? I've a family member working in the bank and have heard nothing to suggest they can stop that trend


Banking is not competitive? Anyone under 40 is using Revolut now, BOI's customer base is dying off.

2.5% and they can't find enough takers. The gap between Deposits and Loans is growing for them (compare Loans V Deposits), and with negative interest rates they lose money on any gap. The bigger that gap, the more the loss.

I'm not meaning to pick apart your point of view, but it's a company I researched myself recently, and the numbers are pretty worrying. I'm just sharing my "research"

A large part of those declining profits were due to provisions for the tracker scandal and large investment in IT.

I love revolut but can’t use it as my main bank as so many companies don’t allow you to set up a direct debit if you have an overseas Iban. Anyone I know who has a revolut only uses it for overseas travel, some I’ve spoke to are wary of transferring savings to it due to it being a relatively new company. In fact if they hadn’t of raised capital last year they would be in trouble right now. Innovation at revolut has completely slowed in the past few years also as they have got bogged down in compliance and regulatory issues. I think it will be a long time before they start offering loans and mortgages in Ireland, they will target the larger markets first. In the meantime, the Irish banks have actually made up some of the gap in technology, as I said earlier, AIB is excellent for loan applications.

Harpon

sk8board wrote: »

The current share price is clearly being manipulated, when you see the names of who is accumulating.
It has a market cap of just €1.45bn, is still a pillar bank, a profitable business however you measure it and is sitting on 5-6 times it’s mar cap in assets.

Ireland also has the benefit of geography when it comes to covid recovery.

If you’re buying this afternoon at €1.30 (all time lows, including financial recession lows, which I think was about €2.05 on post 30-1 basis) and switching off the TV for the next 2+ years, you probably have little to worry about.

If you’re a day trader or looking for a pop in the next few weeks, you may be disappointed.

I bought yesterday and am now at €1.35 average. Wake me up in a few years.

That’s my thinking also, though I have a longer timeframe of 4 years for this investment. I think next year will be pretty bad too in terms of profits. I don’t care if the share price goes down another 50% as it’s impossible to call the bottom but when you are buying something at about 2 times last years earnings, the risk reward ratio here is extremely appealing.

Shedite27

Harpon wrote: »

A large part of those declining profits were due to provisions for the tracker scandal and large investment in IT.

I love revolut but can’t use it as my main bank as so many companies don’t allow you to set up a direct debit if you have an overseas Iban. Anyone I know who has a revolut only uses it for overseas travel, some I’ve spoke to are wary of transferring savings to it due to it being a relatively new company. In fact if they hadn’t of raised capital last year they would be in trouble right now. Innovation at revolut has completely slowed in the past few years also as they have got bogged down in compliance and regulatory issues. I think it will be a long time before they start offering loans and mortgages in Ireland, they will target the larger markets first. In the meantime, the Irish banks have actually made up some of the gap in technology, as I said earlier, AIB is excellent for loan applications.

They're a classic startup, build the user base, they hit 1m Irish users this week and launched in the US last month. They'll no doubt go into debt before turing hugely profitable a la so many of the startups.

Innovation has slowed down recently? In the last 6 months they have added Stock Markets, Cryptocurrency, Insurance products, Savings products. The only thing left for them is loans and mortgages.

Harpon

Shedite27 wrote: »

They're a classic startup, build the user base, they hit 1m Irish users this week and launched in the US last month. They'll no doubt go into debt before turing hugely profitable a la so many of the startups.

Innovation has slowed down recently? In the last 6 months they have added Stock Markets, Cryptocurrency, Insurance products, Savings products. The only thing left for them is loans and mortgages.

As far as I remember the stock market and crypto features were complete gimmicks, were you don’t actually own the underlying products, you are just basically betting on the price, maybe I got that wrong. Anyway they aren’t areas Irish banks are involved in.

manonboard

Harpon wrote: »

As far as I remember the stock market and crypto features were complete gimmicks, were you don’t actually own the underlying products, you are just basically betting on the price, maybe I got that wrong. Anyway they aren’t areas Irish banks are involved in.

My mate bought 1k of stock on a penny share. Sold at a 1500 increase n cant get the money from revolut. It's been 3 weeks.
They keep saying they need to get answers from thier broker.
Surprised. I use thier current alot n never had problems.
Put me right off trading with them in the future.

Shedite27

Harpon wrote: »

As far as I remember the stock market and crypto features were complete gimmicks, were you don’t actually own the underlying products, you are just basically betting on the price, maybe I got that wrong. Anyway they aren’t areas Irish banks are involved in.

Possibly, most spots that allow fractional shares are similar. I was saying it more to try to show you that innovation hasn't dried up there (as you said).

BOI wouldn't be for me. Their new competitors are more attractive, and aren't stuck with the legacy system issues that BOI are.

Harpon

Shedite27 wrote: »

Possibly, most spots that allow fractional shares are similar. I was saying it more to try to show you that innovation hasn't dried up there (as you said).

BOI wouldn't be for me. Their new competitors are more attractive, and aren't stuck with the legacy system issues that BOI are.

Boi are supposed to be rolling out their new system anytime now. Let’s see what it’s like. I’m more invested in AIB.

konline

Harpon wrote: »

Boi are supposed to be rolling out their new system anytime now. Let’s see what it’s like. I’m more invested in AIB.

AFAIK BOI has been spending lot of money on the new system and engaging many vendors and contractors. I hope once the system is ready they will save money.

otterj

Harpon wrote: »

A large part of those declining profits were due to provisions for the tracker scandal and large investment in IT.

I love revolut but can’t use it as my main bank as so many companies don’t allow you to set up a direct debit if you have an overseas Iban. Anyone I know who has a revolut only uses it for overseas travel, some I’ve spoke to are wary of transferring savings to it due to it being a relatively new company. In fact if they hadn’t of raised capital last year they would be in trouble right now. Innovation at revolut has completely slowed in the past few years also as they have got bogged down in compliance and regulatory issues. I think it will be a long time before they start offering loans and mortgages in Ireland, they will target the larger markets first. In the meantime, the Irish banks have actually made up some of the gap in technology, as I said earlier, AIB is excellent for loan applications.

N26 is also an option. It has a european banking licence and deposits up to €100k are guaranteed. Sign up with my referral code brianf4266

Dave elle

https://www.irishtimes.com/business/covid-lockdown-could-lead-to-new-bank-bailout-1.4255529?mode=amp

Fool me once .........

Harpon

Dave elle wrote: »

https://www.irishtimes.com/business/covid-lockdown-could-lead-to-new-bank-bailout-1.4255529?mode=amp

Fool me once .........

The government should use this opportunity to build a larger stake in the 2 main banks, then start collecting dividends of 10% or more in 4 years time once covid19 is in the rear view mirror, or else they could use their increased power at the bank to force them to lower mortgage rates in order to stimulate the economy

Mad_maxx

Harpon wrote: »

The government should use this opportunity to build a larger stake in the 2 main banks, then start collecting dividends of 10% or more in 4 years time once covid19 is in the rear view mirror, or else they could use their increased power at the bank to force them to lower mortgage rates in order to stimulate the economy

that would spook markets , markets hate government involvement

ShareShare

Harpon wrote: »

The government should use this opportunity to build a larger stake in the 2 main banks, then start collecting dividends of 10% or more in 4 years time once covid19 is in the rear view mirror, or else they could use their increased power at the bank to force them to lower mortgage rates in order to stimulate the economy

They shouldnt get involved in that area. People don't want to put their money where governments can change the terms at will. The rates need to be fixed by fixing the issues that allow the rates to be so high. eg: evictions. Landlord protection. Affordable house. Housing supply. Rates are just financial risk/reward calculations. The root problem of the risks is the source of the rates.

Harpon

ShareShare wrote: »

They shouldnt get involved in that area. People don't want to put their money where governments can change the terms at will. The rates need to be fixed by fixing the issues that allow the rates to be so high. eg: evictions. Landlord protection. Affordable house. Housing supply. Rates are just financial risk/reward calculations. The root problem of the risks is the source of the rates.

The whole rates are high because we can’t evict is just what the banks want you to believe, fact is they have made billions year after year after year without evictions

Fol20

Harpon wrote: »

The whole rates are high because we can’t evict is just what the banks want you to believe, fact is they have made billions year after year after year without evictions

Where is your evidence for this as the the proof is in the pudding.

Risk vs reward combined with Ireland having a tiny market share is the reason for it. If banks had super profits more banks would enter the market and rates would decrease naturally with competition. This isnt the case here so i think what you are saying is false.

Why defend people that are not paying their mortgage if they have been arrears for 5years+ If you look to europe or america, they would have been out of the house within a year.

Donald Trump

Harpon wrote: »

The whole rates are high because we can’t evict is just what the banks want you to believe, fact is they have made billions year after year after year without evictions

You should put all your money into Bank shares so! I don't follow the Bank share price but a google graph tells me that the market valued them at about 400 Euro apiece in Feb 2007. Down to 1.45 now. (I presume that those graphs are adjusted for splits etc)



Put 100k in and when they get back up to 400 Euro in a year or two you'll have 40m. They definitely won't go to zero given all the billions that they are making

Mad_maxx

Harpon wrote: »

The whole rates are high because we can’t evict is just what the banks want you to believe, fact is they have made billions year after year after year without evictions

how come foreign banks have no interest in the irish market ? , if its so lucrative what with the high rates relative to the rest of the eurozone , whats keeping them out ?

the answer is lending is risky in ireland , you have little recourse if borrowers go rogue

cause and effect

Mad_maxx

Donald Trump wrote: »

You should put all your money into Bank shares so! I don't follow the Bank share price but a google graph tells me that the market valued them at about 400 Euro apiece in Feb 2007. Down to 1.45 now. (I presume that those graphs are adjusted for splits etc)



Put 100k in and when they get back up to 400 Euro in a year or two you'll have 40m. They definitely won't go to zero given all the billions that they are making

due to dilution , the share price today is misleading , i think bank of ireland topped out at around 18 billion market cap in 2007 ?

Geuze

Mad_maxx wrote: »

how come foreign banks have no interest in the irish market ? , if its so lucrative what with the high rates relative to the rest of the eurozone , whats keeping them out ?

the answer is lending is risky in ireland , you have little recourse if borrowers go rogue

cause and effect

Yes, banks here must hold more capital against mortgages.

https://assets.gov.ie/6836/664f5174ebd34f7e938aea654bed6757.pdf

Why they must hold more capital is due to our repossession regime.

So even at the same interest rate, mortgage lending is less profitable here.

Donald Trump

Mad_maxx wrote: »

due to dilution , the share price today is misleading , i think bank of ireland topped out at around 18 billion market cap in 2007 ?

Regardless, their own link gives a current market cap of 1.58bn https://investorrelations.bankofireland.com/share-price-centre/


If that poster believes they are making billions every year, he should get onto that and buy up as much as he can.

Harpon

Mad_maxx wrote: »

how come foreign banks have no interest in the irish market ? , if its so lucrative what with the high rates relative to the rest of the eurozone , whats keeping them out ?

the answer is lending is risky in ireland , you have little recourse if borrowers go rogue

cause and effect

The Irish market is a real sweet spot for the two biggest banks, it’s large enough that they can make around a billion in profit during normal years, but no so large as to attract any competition. The fact they don’t have to pay tax on profits probably puts off a lot of potential competitors too.

Mad_maxx

Donald Trump wrote: »

Regardless, their own link gives a current market cap of 1.58bn https://investorrelations.bankofireland.com/share-price-centre/


If that poster believes they are making billions every year, he should get onto that and buy up as much as he can.

agree entirely

banking is a sh1t business here