Bank of Ireland shares

DulchieLaois

Trend is up if brexit deal happens, down i am sure If a no deal happens

DulchieLaois

Down, down and down

Dinarius

Thursday is D-Day for EU and Brexit.

Wouldn't be surprised to see it drift until then.

Also, MACD and OBV are negative. And, it's way above 50 day EMA.

All in all, a breather is no harm. If we pull back to €2.50-60, I might buy a few.

But, we've heard zip from the Irish banks about how they're doing in this Covid era. Can it be all OK? Surely not. One bad trading statement and we're back below €2 before you can click Sell.

D.

rugbyman

Dinarius
I am inclined to agree with you on market being overkeen on Bank of Ireland, I imagine the virus will leave many Irish firms high and dry, this will impinge on the banks,though their security on bad loans should help.

Anyway, point number 2,is, your referred a few times to daily turnover in shares .It SEEMS to me that the figure quoted on Degiro is only shares traded on their siteI may be wrong.

Dinarius

rugbyman wrote: »

Dinarius
I am inclined to agree with you on market being over keen on Bank of Ireland, I imagine the virus will leave many Irish firms high and dry, this will impinge on the banks,though their security on bad loans should help.

Anyway, point number 2,is, your referred a few times to daily turnover in shares .It SEEMS to me that the figure quoted on Degiro is only shares traded on their site I may be wrong.

Yes, that's correct.


According to Davy's website, just under 7m shares were traded on Friday.


But, the price is the price and non-volume indicators would be the same.


Interesting times.

D.

daheff

DulchieLaois wrote: »

Down, down and down

bad vibes on Brexit push it down. If EU/UK can agree a deal price goes up. If they fall out....price to drop again



I'm betting on a Brexit fudge deal later wed night.

DulchieLaois

With Boris being soo unpredictable, it’s a 50/50 bet on how the shares will mousy forward, fudge deal is possible but as a cost of small increase yet share price will go anywhere over 3 - 3.20 ,,..thinK BOI reached the high end

Dinarius

Now that the sherpas have done the heavy lifting, Boris can summit (with the help of a crane) sometime tomorrow and return to London uttering, "Peace in our time.", late tomorrow or on Friday.

Price action - stable price, but solid volume - seems to be anticipating this.

D.

sk8board

A new player taking 3.15%.
Massachusetts Financial Services Company


https://www.lse.co.uk/rns/BIRG/notification-of-major-holdings-to7sgpajzx6e3oh.html

DulchieLaois

Where does BOI goes now with no deal confirmation ?

Morleystreet

DulchieLaois wrote: »

Where does BOI goes now with no deal confirmation ?

Link?

codrulz

nice to move into the 3.20s, up >100% now since first entry (in nominal terms).

rugbyman

Welcome back Coldruz,
Its a while
since you and another person(forget name at moment) had thus site going well(imo) with daily comments and forecasts. Every now and again people wander in here ,and get lectured at.
Last weels 10per cent rise and hardly a comment.
I will look back now for the other persons name.
Regards

codrulz

rugbyman wrote: »

Welcome back Coldruz,
Its a while
since you and another person(forget name at moment) had thus site going well(imo) with daily comments and forecasts. Every now and again people wander in here ,and get lectured at.
Last weels 10per cent rise and hardly a comment.
I will look back now for the other persons name.
Regards

Haha agreed rugbyman. It’s nice when there’s some chat around here. If I recall correctly you’ve completely closed out at the 2.80s?

Mad_maxx

i closed out partially at 3 euro even and the rest at 2.85

i see 3.30 as resistance for a while so probably get back in around 3

codrulz

Yeah 3.00 going to be support going forward I believe. A lot of optimism baked in but rally to 4 is definitely on the cards !

rugbyman

had a look back , the enjoyable debates included mad max and Coldrulz, with accurate predictions.
then ye went off into hibernation

Coldrulz, had a look at my trading history, yes I sold most at 2.80, but bought in and out since that. latest batch bought in 2.90's sold this week.

if yourself and Max are right ,with a fall to low 3's, will pile in, perhaps in bigger stakes, I have my profit available to spend

Regards

Mad_maxx

rugbyman wrote: »

had a look back , the enjoyable debates included mad max and Coldrulz, with accurate predictions.
then ye went off into hibernation

Coldrulz, had a look at my trading history, yes I sold most at 2.80, but bought in and out since that. latest batch bought in 2.90's sold this week.

if yourself and Max are right ,with a fall to low 3's, will pile in, perhaps in bigger stakes, I have my profit available to spend

Regards

i traded bank of ireland for several months post march but reduced my holding a good bit post 2.50 , i then sold out entirely @ 3 as i was focusing on Tesla which has been a revelation for me since Septemeber , no stamp duty either , i also got into AIB at a euro six weeks ago but sold out a few weeks ago at 1.60 , thought it would drop back to 1.40 but it bottomed at 1.47 a week ago

i always suspected bank of ireland might well go to 3.30 but sort of grew sick of it

codrulz

Mad_maxx wrote: »

i traded bank of ireland for several months post march but reduced my holding a good bit post 2.50 , i then sold out entirely @ 3 as i was focusing on Tesla which has been a revelation for me since Septemeber , no stamp duty either , i also got into AIB at a euro six weeks ago but sold out a few weeks ago at 1.60 , thought it would drop back to 1.40 but it bottomed at 1.47 a week ago

i always suspected bank of ireland might well go to 3.30 but sort of grew sick of it

yeah BOI was a great range trade from march - September , then thankfully it grew some legs! bought in and held then from September 22 or so when it fell to 1.62 and added for the past while.
similarly with AIB I was holding both and trading both shorter-term but then the correction between AIB and BOI seemed to break down with BOI outperforming which led me to pushed more into AIB, still haven't sold anything, only continued to average up. I think I'll move on if/when a deal is made ! I'm leveraged too so don't feel im missing out elsewhere

md23040

Mad_maxx wrote: »

i traded bank of ireland for several months post march but reduced my holding a good bit post 2.50 , i then sold out entirely @ 3 as i was focusing on Tesla which has been a revelation for me since Septemeber , no stamp duty either , i also got into AIB at a euro six weeks ago but sold out a few weeks ago at 1.60 , thought it would drop back to 1.40 but it bottomed at 1.47 a week ago

i always suspected bank of ireland might well go to 3.30 but sort of grew sick of it

Sorry to diverge but can help but comment that Tesla is for YOLO Day Traders. At some stage it will end badly. The fundamentals dont make sense. I follow so many brokers and analysts globally through LinkedIn and the majority are staying well clear of the stock the more it balloons. Its ok if it represents about 2.5% of your overall portfolio initial investment, and has since gone through the stratoshpere but bag some of the profits on the up and mitigate against the risk or potential for an inevitable free fall.

I believe the future for cars and energy storage will change soon to green hydrogen. It makes more sense as the amount of cobalt and lithium cannot sustain energy demands transistion from fossil fuels. Sorry again for the divergence.

Mad_maxx

md23040 wrote: »

Sorry to diverge but can help but comment that Tesla is for YOLO Day Traders. At some stage it will end badly. The fundamentals dont make sense. I follow so many brokers and analysts globally through LinkedIn and the majority are staying well clear of the stock the more it balloons. Its ok if it represents about 2.5% of your overall portfolio initial investment, and has since gone through the stratoshpere but bag some of the profits on the up and mitigate against the risk or potential for an inevitable free fall.

I believe the future for cars and energy storage will change soon to green hydrogen. It makes more sense as the amount of cobalt and lithium cannot sustain energy demands transistion from fossil fuels. Sorry again for the divergence.

the experts have been saying that about Tesla for years , its a phenomenon , i did however sell three quarters of my holding on friday , i only got into Tesla after the sell off in september ,up 13 k since with the bould ELON

Dinarius

New Covid strain creates more uncertainty.

Down a bit this morning. With markets soon closing for a few days, wouldn't be surprised to see it drift even lower.

D.

Mad_maxx

might be range bound between 3 and 3.30 for a few weeks ?

codrulz

Mad_maxx wrote: »

might be range bound between 3 and 3.30 for a few weeks ?

well supported today, alongside AIB.. really surprised vs the broader market, no change vs Fridays price this afternoon while European banks are down 4.5%!

Yeah, I think upside is capped for now. into the new year with a deal and seeing vaccines roll out should hopefully keep the train rolling then.

Mad_maxx

codrulz wrote: »

well supported today, alongside AIB.. really surprised vs the broader market, no change vs Fridays price this afternoon while European banks are down 4.5%!

Yeah, I think upside is capped for now. into the new year with a deal and seeing vaccines roll out should hopefully keep the train rolling then.

been building positions in the irish REIT,s myself , 4% dividend and i think they are undervalued relative to the market, i realise they have not tracked the real market particularly well but they are here to stay, view them as relatively conservative holdings and i havent the time to trade like i did

im trading Tesla in whatever bit of trading im doing and no stamp duty to worry about but could have a go at the irish banks again if we get a good dip , more interested in AIB at this stage , think its undervalued compared to BIRG but what do i know

bankboucy

In regard to Irish banks - everyone is fighting the last war.

This crisis is an income statement recession - the GFC was a balance sheet recession and the largest you and I are likely to see in our lifetimes. Household & Bank balance sheets were completely destroyed with negative equity, the negative wealth effects then hit incomes and credit was completely withdrawn from the economy as Irish banks were no longer able to source inter-bank capital meaning they desperately attempted (& failed) to rebuild their capital base by choking off the oxygen source that was fueling a large chunk of Ireland's GDP which was overly dependent on credit fueled construction related activities (the paradox of thrift writ large). Bank balance sheets then had limited shock absorbers and tangible book value was destroyed in the process wiping out existing shareholders. Bank's were on paper better businesses then (higher ROE) but they were inherently more leveraged and by extension more dangerous as any 2008 vintage BOI/AIB diluted shareholder found out. Ireland Inc. had stupidly tied itself to the banks such that every inch of fiscal space that could have been used to support the real economy with stimulus got pored into zombie banks & got locked up as regulatory capital on bank balance sheets - stagnant and un-lent. In short the Irish bank bailout had ‘no velocity’ in the real economy, zero in fact.

Irish/European bank's today are boring, don’t make as good returns but are orders of magnitude less likely to destroy shareholder equity. On the continent the profit pool for banks has shrunk so much that its clear that there is 2-3x the number of banks needed in most large European countries and consolidation is the only pathway to rational returns where banks earn at least their cost of capital over a cycle. In this one instance Ireland is a country from the future - unless people haven’t noticed, we already have a consolidated banking sector - AIB / BOI / Ulster - own about 70% of the mortgage market and near 90%+ of SME lending. Ulster seems ready to exit stage left too for those not following the news.

Today BOI is stuffed to gills with capital and not sh*tty overnight interbank capital, no boring 0% yielding current account customer deposits & negative yielding corporate deposits (+ some CoCo bonds). BOI has dealt with non-performing loans to a greater degree than most European/Irish banks with NPL exposure down to 4%. The loans they've written for the past 11 years I can assure you have been written to a very conservative standard under the watchful eye of the CBI/ECB & SSM. BOI's legacy culture of being Ireland's least likely underwriting bank team to 'reach' for deals persists (BOI ‘only’ joined the Anglo Irish bank / Celtic tiger madness fairly late..c.2006) and if there's one thing bank execs do well its self preservation and post GFC BOI was not going to be writing PoS loans as it, first fought for survival, then raced to get the government out off its shareholder registrar (Wilbur Ross / Prem Watsa say thanks). CET1 capital buffers are very large at BOI and currently a clear 5% over their new revised 9.27% regulatory minimum. ALOT!!! of bad things need to happen to get to breach regulatory levels and wipe out shareholder equity with dilutive capital raise. Look at the ECB/SSM stress tests to see what the banks have been built to ride out. People also don’t default on mortgages with 30-40% positive equity………..just doesn’t happen.

This crisis is terrible but it wont be enough to destroy book value of the Irish banks. In the last crisis billions of euros was pored into the black hole of balance sheets- the sovereign borrowing for this purpose did nothing to stimulate the real economy - it repaired bank balance sheets and never reached Joe Public’s wallet. Instead of Keynesian spending to boost the economy, austerity was imposed as all spare fiscal space was used to plug the holes in the banks we'd stupidly guaranteed. Rates weren't even at zero then (anyone remember the ECB raising rates in 2011?!!!?) The Irish economy is much more balanced this time - the FDI sectors we rely on should remain robust (Tech / Healthcare / Financial Services). AIB/BOI can actually lend through this crisis given the capital buffers they have - all very different than the last time. Ireland 2009 - 2014 was a financial wasteland mired in an internal devaluation & a deflationary bust. The government this time can, should and is borrowing at near zero rates to support damaged household incomes bridging them from the COVID to the post-COVID economy. Vaccines give us a timeline for this - Q3 2021 for mass vaccination and normal-ish economy. The EU via ECB will be accommodative and has done a fluffed Eurobond with federal like stimulus payments. The ECB will hoover up any bonds we print keeping nominal rates on new Irish borrowing at effective negative rates. State aids rules have been thrown out the window - the Irish government can and should support Irish SME’s robustly to bridge them to health (this includes helping them pay their loans!!). The credit guarantee scheme should see a situation arise where banks SME legacy loan book will be bailed out by new credit guarantee loans for businesses with a post-pandemic future (rightly so).

Now whats Bank of Ireland worth then today?????

In a post-Covid stabilized world of 0% interest rates & Eire growing GDP 2-3% a year. Lets call it Ireland 2022 to be safe (so negative earnings for BOI in 2020 & 2021). I’m going to repeat the write downs on H1 2020 c.700m, into H2 2020 & 2021…so a hit to equity of another c.2bn. Share holder equity of BOI in 2022 would likely be reduced to c.7bn then. Bank of Ireland can earn conservatively 8% on equity so about c.500 million a year in 2022. 50% retained/50% distributed to shareholders. Book will then grow c.3.x% a year in that scenario, so 2023 earnings 637m (7% on 9.1bn), 2024 = 659m, 2025 =682m, 2026 = 706m etc. Maths are super rough!. I'll leave terminal growth rate at 2%. DCF the earnings at a 10% risk free rate - banks are cyclical & don’t deserve a market multiple of 15x. Bank of Ireland's intrinsic value IMO is c.6 euro a share.

I could add in credit for future headcount/cost cuts once IT transformation is complete - but people are people and sacking colleagues/friends requires stomach European's in relatively small communities/markets like Ireland/Dublin don’t have. If real efficiency, branch closures and slashing and burning was done I'm positive RoTE could get up to 10%. Depends on how ambitious Francesca McDonough is and what her post-BOI ambitions are.

The other thing I gave BOI no credit for was the net present value of its carried forward losses from the GFC of c.1bn...have no doubt that is genuine asset sitting inside the bank for the next decade+….…the net present value of that could easily be 500m between friends. If you wanted to be aggressive you could back that out of the price you’re paying today for BOI maybe say its worth 0.59 a share alone.

Saw some folks a few threads back talk about challenger banks - for sure AIB/BOI need to wake up and realize the duopoly they’ve been re-handed in the Irish market is permanent only if they work at it…this needs to be done before a 3rd online digital player emerges with real scale I looked at Revolut/N26 and sorry they’re just not at the races in terms of deposits not even close……AIB/BOI are in a very privileged position collecting such low cost deposits from the Irish population and should immediately team up with PTSB/Ulster & create a cross institution instant payment app to kill revolut & stop Venmo or Square in the future. A digital only millennial sub-brand banking app of BOI should be looked at (Santander is doing something similar).

Finally think with Sinn Fein off the table for possibly the next 4.5 years. The big risk to the banks - Government meddling (this is why AIB imo is untouchable as an alternative investment given 90%+ ownership by the state and even the hints Sinn Fein might control it one day), is somewhat reduced, lets see how stable this coalition is…….the populist thing to do is to drive the banks into unprofitable lending & double down on repossession barriers/asset recourse…….I think Paschal Donohue + others in FF are pragmatic enough to understand that like it or lump it a functioning profitable market led banking system is key pillar of economic prosperity. Ireland already ran the experiment of what happens to an economy without a functioning prudent underwriting led banking system.

Lots of people on here trading BOI - I suggest not doing that - I’ve bought and held since 1.70………when its 20% off my conservative estimation of 6 euro per share intrinsic value (c.4.80) I’ll look again to see if my thesis is still in tact and only then consider my next move. Jumping in and out is a dangerous game - a true trader plugged into the ziegesit is a rare beast (Paul Tudor Jones & Stanley Druckenmiller come to mind)……I’d suggest most here aren’t traders. Big moves in stocks happen on tiny amounts of days......nobody can tell when exactly......but you can tell that over time a business earning 0.60c a share in a quasi-monopoly business with high barriers to entry in a western European democracy with good demographics can easily trade at x10 eps......or 6 euro......dont double guess it.

codrulz

Mad_maxx wrote: »

been building positions in the irish REIT,s myself , 4% dividend and i think they are undervalued relative to the market, i realise they have not tracked the real market particularly well but they are here to stay, view them as relatively conservative holdings and i havent the time to trade like i did

im trading Tesla in whatever bit of trading im doing and no stamp duty to worry about but could have a go at the irish banks again if we get a good dip , more interested in AIB at this stage , think its undervalued compared to BIRG but what do i know

Agree, REIT's are a solid idea and certainly one of the more attractive areas to place money atm.

I 100% agree with AIB vs BOI the last while, around September the correlation between the two began to breakdown and BOI was outperforming, BOI was around 2.10 when AIB was still <1€, whereas before with BOI at 2.10 AIB was around 1.30. As such , levered up on AIB and my AIB holdings are actually 4x the amount I have in BOI now ... but there's no AIB chat on here lol

RaggyDays

Problem with AIB is it is 71% a state Bank. Unless the Government are willing to sell large chunks then the Investment/pension funds are not interested.
BOI is being bought up by these institutions over the last 12 months, once they get a large enough holding they will then push up the price by 2-4X simply because they can and will. It's what they always do.
Even over the last few days with all the news we still have a steady buying pressure here. Some Institution is active.
I'm expecting at least 4 euro on the day a Brexit deal gets announced, whether it is this Wednesdays or a Wednesday in Mid February next

Mad_maxx

RaggyDays wrote: »

Problem with AIB is it is 71% a state Bank. Unless the Government are willing to sell large chunks then the Investment/pension funds are not interested.
BOI is being bought up by these institutions over the last 12 months, once they get a large enough holding they will then push up the price by 2-4X simply because they can and will. It's what they always do.
Even over the last few days with all the news we still have a steady buying pressure here. Some Institution is active.
I'm expecting at least 4 euro on the day a Brexit deal gets announced, whether it is this Wednesdays or a Wednesday in Mid February next

both are institutional money trading play things regardless of the fact that AIB is nearly entirely state owned

even before covid , both got slammed hard several times each year , no real logic or pattern bar both being in long term bear markets , of course the fleet of foot can still profit but id view neither as solid long term investments

Mad_maxx

codrulz wrote: »

Agree, REIT's are a solid idea and certainly one of the more attractive areas to place money atm.

I 100% agree with AIB vs BOI the last while, around September the correlation between the two began to breakdown and BOI was outperforming, BOI was around 2.10 when AIB was still <1€, whereas before with BOI at 2.10 AIB was around 1.30. As such , levered up on AIB and my AIB holdings are actually 4x the amount I have in BOI now ... but there's no AIB chat on here lol

both IRES and Hibernia reported fairly solid earnings in recent quarters , SP is cheap in both cases and dividend yield strong , biggest concern i always hold with REITs is directors over rewarding themselves at the expense of shareholders