Bank of Ireland shares

Timing belt

daheff wrote: »

down about 7.5% today. SP below 3 at the moment.

anybody have any insight as to why?

It looks like the ECB might cut rates in an effort to devalue the EUR against USD in a effort to fight off deflation. US Treasuries yield dropped off the back of the ECB announcement.

If they do cut rates then it will help generate inflation in Europe but the banks will be charged more for their deposits with the ECB so lower NIM for the banks.

Chuckie_Egg

I think we are about to enter the era of charges on deposits. BOI have already done this to cash in pension funds, now they have targeted Balances over €3 million. I think it is only a matter of time before it is across the board.
It really is the result of the monetary policy of the central banks, it was inevitable as these retail banks must make profits at the end of the day.
Long gone are the days of earning 4-5% interest for money on deposit. It'll be all about getting the best deal while you are trying to hold cash.

Dinarius

Chuckie_Egg wrote: »

I think we are about to enter the era of charges on deposits. BOI have already done this to cash in pension funds, now they have targeted Balances over €3 million. I think it is only a matter of time before it is across the board.
It really is the result of the monetary policy of the central banks, it was inevitable as these retail banks must make profits at the end of the day.
Long gone are the days of earning 4-5% interest for money on deposit. It'll be all about getting the best deal while you are trying to hold cash.

This is being addressed legally in the UK - to protect those who are not eligible for card and electronic transactions and who are forced to deal in cash. The UK is losing 500 cash machines per month. Rural dwellers now have to drive further and further to access cash, which they have fewer and fewer outlets to use. Urban poor are equally screwed.



The issue of cash, and one's ever limited ability to use it, is a car crash waiting to happen.


Banks need to be forced on this issue. I'm just not sure how.


D.

Chuckie_Egg

Dinarius wrote: »

This is being addressed legally in the UK - to protect those who are not eligible for card and electronic transactions and who are forced to deal in cash. The UK is losing 500 cash machines per month. Rural dwellers now have to drive further and further to access cash, which they have fewer and fewer outlets to use. Urban poor are equally screwed.



The issue of cash, and one's ever limited ability to use it, is a car crash waiting to happen.


Banks need to be forced on this issue. I'm just not sure how.


D.

Problem is Banks are private entities and have no obligation to do anything like that. It may come down to the Government having to subsidise cash machines. BOI have already offloaded ownership of their Bank link network. A smart move by Francesca

sk8board

Chuckie_Egg wrote: »

Problem is Banks are private entities and have no obligation to do anything like that. It may come down to the Government having to subsidise cash machines. BOI have already offloaded ownership of their Bank link network. A smart move by Francesca

Was chatting to our local mini market owner (semi rural Dublin) yesterday and he said the cash v cashless split was 70% cashless and atm withdrawals there had dropped hugely.
He said cashless was 55-60% pre lockdown 1, but the bump to €50 was most of the incentive.
He’s still showing folks how to tap their card for the first time and most didn’t even realise the card they already had could do it already.

I think it’s hugely positive personally, but I can see the issues with reduced cash in circulation for some.
Personally I’m 99% cashless in all aspects.

Jim2007

Dinarius wrote: »

Banks need to be forced on this issue. I'm just not sure how.

Ranks right up there as attempts to revive the Irish language, with the same outcome.

The incentive for home invasions, particularly relating to old people etc.... would be reduced if there was not expectation of finding cash for instance..

Dinarius

Jim2007 wrote: »

Ranks right up there as attempts to revive the Irish language, with the same outcome.

The incentive for home invasions, particularly relating to old people etc.... would be reduced if there was not expectation of finding cash for instance..

You’re making my point for me.

If the banks could be forced to behave and allow practical and affordable use of cash, there wouldn’t be any kept in homes.

But, we’re way off thread now.

D.

Chuckie_Egg

Dinarius wrote: »

You’re making my point for me.

If the banks could be forced to behave and allow practical and affordable use of cash, there wouldn’t be any kept in homes.

But, we’re way off thread now.

D.

Again Banks are private entities, they cannot be forced to do x,y or z, why should they. they answer to shareholders not the local TDs.
The problem with charging for holding deposits is not the fault of the banks but the Fault of the ECB, FED, and other central banks.
If old people are hoarding cash then I'd say its for other reasons other than bank charges, it's more than likely related from the shadow economy, as in they are hiding money from the Tax man or Social welfare

Donald Trump

Chuckie_Egg wrote: »

Again Banks are private entities, they cannot be forced to do x,y or z, why should they. they answer to shareholders not the local TDs.
The problem with charging for holding deposits is not the fault of the banks but the Fault of the ECB, FED, and other central banks.
If old people are hoarding cash then I'd say its for other reasons other than bank charges, it's more than likely related from the shadow economy, as in they are hiding money from the Tax man or Social welfare

Banks are given licences to operate. It is a regulated, and therefore protected, market.



There can of course be conditions attached to those licences.

Chuckie_Egg

Doesn't matter for BOI, they no longer own ATMs
Plus all regional banks in Europe and the US are starting to charge deposit accounts. If the Government don't want this then they will have to nationalise every bank around the world which is not going to happen

Donald Trump

Chuckie_Egg wrote: »

Doesn't matter for BOI, they no longer own ATMs
Plus all regional banks in Europe and the US are starting to charge deposit accounts. If the Government don't want this then they will have to nationalise every bank around the world which is not going to happen

I have money in a deposit account in the US. Interest rate isn't great but at least is better than Ireland. No charges.



Rates are projected to increase a bit in the US over the coming year. If you are getting charged for deposits in the US I would suggest shopping around.

codrulz

very little going on these days, I closed my BIRG and AIB positions a few weeks back... for now, to focus elsewhere, including some VIX puts. But I will be back in for more medium term soon.

I'm still very bullish on BOI and think in the coming months and years we shall see >€5. BOI has a duopoly, charges twice the average interests seen in Europe (without the NPL on their books anymore really) and of course their performance pre-pandemic was very good, €1 billion in profit is a healthy figure that won't be eroded soon in my view, what other businesses can you think of that are valued at only 3.75X yearly profits!

There may be a continued reflation rally and a further warming to bank stocks this year. The disdain by Irish investors towards Irish banks is certainly something I see as hampering BOI's share price, the % of BOI held by retail is small at ~10% , and something that if we see shifting could really boost SP .. however this is pretty unlikely, older people I've spoken to (those with more money!) say never again , while young investors (with little to nothing to invest) see the upside and appreciate that the bank of a very different business to that of 15 years ago.

Regardless of this, my belief of the last (nearly!) year or so that European banks will outperform continues.

for those still reading, my final average in for BIRG was 1.62 in , out at 3.5 and AIB in 0.93, out 1.70

Bass Reeves

codrulz wrote: »

very little going on these days, I closed my BIRG and AIB positions a few weeks back... for now, to focus elsewhere, including some VIX puts. But I will be back in for more medium term soon.

I'm still very bullish on BOI and think in the coming months and years we shall see >€5. BOI has a duopoly, charges twice the average interests seen in Europe (without the NPL on their books anymore really) and of course their performance pre-pandemic was very good, €1 billion in profit is a healthy figure that won't be eroded soon in my view, what other businesses can you think of that are valued at only 3.75X yearly profits!

There may be a continued reflation rally and a further warming to bank stocks this year. The disdain by Irish investors towards Irish banks is certainly something I see as hampering BOI's share price, the % of BOI held by retail is small at ~10% , and something that if we see shifting could really boost SP .. however this is pretty unlikely, older people I've spoken to (those with more money!) say never again , while young investors (with little to nothing to invest) see the upside and appreciate that the bank of a very different business to that of 15 years ago.

Regardless of this, my belief of the last (nearly!) year or so that European banks will outperform continues.

for those still reading, my final average in for BIRG was 1.62 in , out at 3.5 and AIB in 0.93, out 1.70

Not only that but any profits are tax free for the banks for next 5+ years. As well even then profits are only taxes at the company rate of 12.5%. one of the reasons the banks may be lagging is because the govern own a part of the banks. On AIB it is over 50% AFAIK and BOI it is Bout 15%. I think if the value of BOI exceeds 5/share the government will divest it part of that. AIB is different because of the scale of its holding

richie123

Bass Reeves wrote: »

Not only that but any profits are tax free for the banks for next 5+ years. As well even then profits are only taxes at the company rate of 12.5%. one of the reasons the banks may be lagging is because the govern own a part of the banks. On AIB it is over 50% AFAIK and BOI it is Bout 15%. I think if the value of BOI exceeds 5/share the government will divest it part of that. AIB is different because of the scale of its holding

Very hard to know.n26 and revolut are taking over right under the big 2 banks noses.
I'm down 50 % on my boi shares ,I normally hold lonv term but I'm seriously thinking of bailing and cut my losses.

Bass Reeves

richie123 wrote: »

Very hard to know.n26 and revolut are taking over right under the big 2 banks noses.
I'm down 50 % on my boi shares ,I normally hold lonv term but I'm seriously thinking of bailing and cut my losses.

I sit it out if I were you unless you have other trading options or can use the loss elsewhere against a capital gain. I am not generally a day trader but I did make a few twists on them with cash I had in the account this year. I have moved most if my investment into the two banks before Christmas.

I am looking at a 5year+ investment but expect a 70%+ gain in that time.

richie123

Bass Reeves wrote: »

I sit it out if I were you unless you have other trading options or can use the loss elsewhere against a capital gain. I am not generally a day trader but I did make a few twists on them with cash I had in the account this year. I have moved most if my investment into the two banks before Christmas.

I am looking at a 5year+ investment but expect a 70%+ gain in that time.

Oh I probably will stick it out.
Negative rates on deposits.
Huge amount of non performing legacy loans.
A good shot of tracker mortgages earning nothing.
But hey they have such massive legacy losses they won't have to pay tax for a few years :)
I bought in a 16 cent few years back thinking surly it was a bottom.
Sharp falling knife more like it.

codrulz

richie123 wrote: »

Oh I probably will stick it out.
Negative rates on deposits.
Huge amount of non performing legacy loans.
A good shot of tracker mortgages earning nothing.
But hey they have such massive legacy losses they won't have to pay tax for a few years :)
I bought in a 16 cent few years back thinking surly it was a bottom.
Sharp falling knife more like it.

negative rates on deposits are hardly a BOI only issue.
NPE ratio was below 5% pre-pandemic and 5.8% in latest figures.
I believe it's about 10k loans that BOI has related to trackers, hardly an overwhelming figure.

Also trying to build out its pension and UK business, but hey if you can't increase profitability, you lower costs - which is also what BOI are doing over the next few years.

Regardless of you being underwater BOI, it appears a strong buy at these levels for a multitude of reasons.

richie123

codrulz wrote: »

negative rates on deposits are hardly a BOI only issue.
NPE ratio was below 5% pre-pandemic and 5.8% in latest figures.
I believe it's about 10k loans that BOI has related to trackers, hardly an overwhelming figure.

Also trying to build out its pension and UK business, but hey if you can't increase profitability, you lower costs - which is also what BOI are doing over the next few years.

Regardless of you being underwater BOI, it appears a strong buy at these levels for a multitude of reasons.

I hope your right.

Chuckie_Egg

With Ulster bank about to pull out of the Irish market, BOI is going to get a lot more profitable.
A couple of the Big Wall street hitters have gotten there claws into BOI on the cheap. Blackrock in particular are all about profit and with a Duopoly in Banking forming with AIB they'll be all about squeezing the customers.
Hold on to those BOI shares, there is an interesting 18 months ahead.

dontparkhere

Chuckie_Egg wrote: »

With Ulster bank about to pull out of the Irish market, BOI is going to get a lot more profitable.
A couple of the Big Wall street hitters have gotten there claws into BOI on the cheap. Blackrock in particular are all about profit and with a Duopoly in Banking forming with AIB they'll be all about squeezing the customers.
Hold on to those BOI shares, there is an interesting 18 months ahead.

I see revolut have added fees as well.

Chuckie_Egg

All those empty Ulster bank branches will make fine Euro shops
I wonder can those bankers be retrained as cashiers?

Jim2007

Chuckie_Egg wrote: »

All those empty Ulster bank branches will make fine Euro shops
I wonder can those bankers be retrained as cashiers?

Bankers are people who hold ownership of a bank, the rest are just employees. And given that NatWest have made no binding commitments, it remains to be seen what will happen...

Many European banks announced that they were divesting themselves of their Investment Banking business on the grounds that if you were not in the top three, you would not make money. That part was true, but 10 years later the decision makers have retried or are gone, lip service is paid to the decision, but business carries on... It is difficult to get management to actually reduce its empire without a decisive decision for the board.

The banking sector is in crisis, it's an unconsolidated commodity basis, everyone is struggling or already reporting losses... moving loss making operations around in such a sector does not help anyone.

Mad_maxx

Chuckie_Egg wrote: »

With Ulster bank about to pull out of the Irish market, BOI is going to get a lot more profitable.
A couple of the Big Wall street hitters have gotten there claws into BOI on the cheap. Blackrock in particular are all about profit and with a Duopoly in Banking forming with AIB they'll be all about squeezing the customers.
Hold on to those BOI shares, there is an interesting 18 months ahead.

Blackrock short as much as they go long , they could start shorting hard again in the morning on irish banks

Chuckie_Egg

Mad_maxx wrote: »

Blackrock short as much as they go long , they could start shorting hard again in the morning on irish banks

Ken Griffin didn't fair too well last September. Blackrock are all about profit, if they see an opportunity to short then they will. They are not stupid and it's more likely that they will double or even treble the share price first before trying such a move.
With Ulster bank out the gate I can see profits in BOI going well over the €1 billion mark every year for the foreseeable future. It's not the every day customer that will be feel the squeeze, it'll be Business owners looking to do refinancing, Farmers getting equipment loans, retailers getting stock loans. They are all going to have to pay more now

Bass Reeves

Permanent TSB took some jump since the he new on Here later bank. Gone from 86c -1.03. I have only a small bit with them. They were as low as 44c during the pandemic. Half of my investment is historical and at a serious loss. But other half was in at 50c.

Timing belt

Chuckie_Egg wrote: »

Ken Griffin didn't fair too well last September. Blackrock are all about profit, if they see an opportunity to short then they will. They are not stupid and it's more likely that they will double or even treble the share price first before trying such a move.
With Ulster bank out the gate I can see profits in BOI going well over the €1 billion mark every year for the foreseeable future. It's not the every day customer that will be feel the squeeze, it'll be Business owners looking to do refinancing, Farmers getting equipment loans, retailers getting stock loans. They are all going to have to pay more now

BOI won’t be hitting 1bn mark for a long time unless interest rates rise very fast.

Bass Reeves

Timing belt wrote: »

BOI won’t be hitting 1bn mark for a long time unless interest rates rise very fast.

Why not. Banks will start charging depositors to hold there money. In general all banks do now is relend finance given from ECB. They work on a margin. Irish banking margin is at least 1% higher than elsewhere in Europe.

Timing belt

Bass Reeves wrote: »

Why not. Banks will start charging depositors to hold there money. In general all banks do now is relend finance given from ECB. They work on a margin. Irish banking margin is at least 1% higher than elsewhere in Europe.

They will only be able to pass on the cost to some customers and won’t be able to make a profit on it if they charge negative rates. The margin is shrinking year after year and will continue to do so as higher yielding bonds roll off and get replaced by bonds with a negative yield.

As for saying all banks do is relend finance from ECB this is not the case as 90% of BOI lending is funded from customer deposits

codrulz

Those ecb depo rates etc can also be misleading , tltro and other rate variables will of course play a factor -potentially to the upside, also as I mentioned above Irish rates are 2x the European avg and it’s much more likely we shall sticky rates thanks to oligopoly etc

Timing belt

codrulz wrote: »

Those ecb depo rates etc can also be misleading , tltro and other rate variables will of course play a factor -potentially to the upside, also as I mentioned above Irish rates are 2x the European avg and it’s much more likely we shall sticky rates thanks to oligopoly etc

They are charging higher rates because they need to hold more expensive capital than other European banks it’s not that they are making more money