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Biggest issue for banks

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  • 05-02-2013 9:39pm
    #1
    Flunch
    Registered Users Posts: 108 ✭✭


    Looking for some opinions..

    Wondering what you think will be the main challenges for the banks in Ireland over the coming years?

    What should their strategy be?
    Tagged:


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    #2
    Scortho
    Closed Accounts Posts: 3,876 ✭✭✭Scortho


    Flunch wrote: »
    Looking for some opinions..

    Wondering what you think will be the main challenges for the banks in Ireland over the coming years?

    What should their strategy be?

    Being able to reposses non performing loans.
    Being able to exit the state guarantee (it's costing them too much)
    Easier for them to sell bond
    Pay less interest to depositors
    A rise in their (boi) share price
    Less loans going into arrears
    Reduced staff numbers and costs
    Increase in number of new loans
    Increase in deposits
    Become profitable again....

    That's a list of the top of my head after a minute. It goes on and on.


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    #3
    andrew
    Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    moved to irish economy forum


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    #4
    Dob74
    Registered Users Posts: 1,049 ✭✭✭Dob74


    Flunch wrote: »
    Looking for some opinions..

    Wondering what you think will be the main challenges for the banks in Ireland over the coming years?

    What should their strategy be?


    There main challenge is to squeeze more money out of foolish politicians and central bankers who thinkb that they walk on water. And can not be replaced.

    The best thing would be break up these rotten banks into smaller ones so they can sink or swim by themselves. Aib has no business being kept intact by the taxpayer. Its gone under twice and has had to be saved by the government. Time to get rid of the corporate overheads. Could get ten small banks out of it. They wouldn't be able to blackmail the government into giving them a nice corporate welfare check. Suppose the politicial insider's and journalists would have to repay there sweetheart loans.

    Hopefully this government will see the light and pull the plug on the incompetent senior management. Who's skill at losing money will take a generation to pay back.


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    #5
    Morrisseeee
    Registered Users Posts: 5,146 ✭✭✭Morrisseeee


    Has there been any banking reform ? in Ireland or Europe or the World ?

    My simple theory: there has to be at least a 2 tier system, one for mere mortals (like me) and one for the gamblers/high-rollers, ie. if the gambling big-banks go down, it's on them, not the general public.

    It's like having a CreditUnion (run properly) for savings/loans and having a Bookies(PP/Boylesports etc) for the gamblers. You go into the bookies and if you loose, it's on you.


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    #6
    Chips Lovell
    Moderators, Politics Moderators, Sports Moderators Posts: 24,269 Mod ✭✭✭✭Chips Lovell


    Their mortgage books. Hasn't really been tackled yet.


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    #7
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    Vladimir Kurtains wrote: »
    Their mortgage books. Hasn't really been tackled yet.

    Specifically the tracker mortgages that are set against the ECB rate instead of Euribor or Libor (which the banks borrow their money at).


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    #8
    Scortho
    Closed Accounts Posts: 3,876 ✭✭✭Scortho


    antoobrien wrote: »
    Specifically the tracker mortgages that are set against the ECB rate instead of Euribor or Libor (which the banks borrow their money at).

    Is there any movement on these for the banks? Surely they cant use change the interest rate from that of the ECB to that of Euribor unless it gives it grounds to do so in the mortgage contracts.
    Id say that had this been in it, theyd already would have changed it?
    Would the best thing for the banks be to outsource/sell the mortgage book at a loss, in order to limit further losses on their trackers?


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    #9
    [Jackass]
    Closed Accounts Posts: 9,193 ✭✭✭[Jackass]


    I think the biggest problem they will have will be balancing the books and in a greater sense, it's one of the biggest problems facing the country.

    Banks will find it extremely difficult to hold sufficient reserves and have anything left over to lend to consumers for the indefinite future, which puts a choke hold on growth and productivity.

    Money has been going down a blackhole to service banking expenditure and not much is coming back in. I'm absolutely amazed that staffing levels haven't been severely cut and some sort of collection outsourcing hasn't evolved, but there may be Governmental involvement in that, but it would seem to make more sense to increase unemployment (despite political damage) and cut large expenditure in that department than in budgets (which is far more politically damaging).

    Basically, the bank is so over exposed that they should really have failed. And their propping up is the biggest mistake of all. A Government bank taking on deposits and having the bailout resources and being set up efficiently and abandoning the private debt would have fast tracked us out of recession, but as it stands we're backed into a quagmire (giggidy! giggidy!) with no obvious solution for the forseable future. We keep kicking the can down the road, but there doesn't seem to be a plan on how to resolve it.

    Perhaps we're at the cusp of a change in tactics now and banks may be liquidised further. There's no point in propping up loss making enterprise with such high exposure and no return to liquidity on the horizon any time soon.


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    #10
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    Scortho wrote: »
    Is there any movement on these for the banks? Surely they cant use change the interest rate from that of the ECB to that of Euribor unless it gives it grounds to do so in the mortgage contracts.
    Id say that had this been in it, theyd already would have changed it?
    Would the best thing for the banks be to outsource/sell the mortgage book at a loss, in order to limit further losses on their trackers?

    Therein lies the problem, the fact that they're tied to ECB rates is in the mortgage contract - which can't be changed unilaterally. They need to get long term funding for these loans.


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    #11
    Flunch
    Registered Users Posts: 108 ✭✭Flunch


    All very vaild points!

    The list just seems endless.

    Trying to get my head around it all for a project im working on.
    Seems impossible theres so much going on..


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    #12
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    Flunch wrote: »
    All very vaild points!

    The list just seems endless.

    Trying to get my head around it all for a project im working on.
    Seems impossible theres so much going on..

    I don't like doing peoples homework but get a copy of the latest annual reports to see where the income streams are vs the costs, that will point it out for you quite nicely. Grab the IBRC reports before the site goes down (if they're not already).

    It's known that about 1/3 of the mortgages are trackers, so were talking in the region of 30bn-40bn loss making loans (in the region of 2% difference between borrowing rates & loan interest rates).


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