AIB returns to stock market

Finance minister Michael Noonan officially announced Tuesday night government plans to sell a 25% stake in AIB, returning part of the bank into private hands. This marks AIB’s dramatic return to the London Stock exchange since it was nationalized almost 7 years ago during the last financial crisis.

Currently 99.9% government owned, the sale of AIB shares will likely be the largest stock market listing of 2017. Analysts estimate that the sale of shares will raise more than €3 billion for the government, contributing to AIB’s slow and steady return of the €20.8 billion of bailout loans it received from 2009 to 2011.

AIB is Ireland’s biggest lender, and since it’s nationalization, has worked hard to renew its image, slashing the amount of bad loans from 29 billion to 8.6 billion. With that and already €6.8 billion of taxpayers’ money returned, AIB CEO Mr. Bernard Byrne hopes the upcoming sale of shares will continue the bank’s process of recovery and reaffirms investor confidence.

Although …

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Survival of the weakest, only in Ireland.

If the State can’t organise a bailout effectively then what hope have they of running a bank? A simple and yet profound question: if the bankers who run banks for a living (many having survived the 70’s and 80’s) can’t find the answers then what hope have the state who have no track record in doing so?

This is not a simple situation, banks that survived the Great Depression have crashed and burned, given this, is it vital to save every bank? Is a bank going to make it even with a slush fund? Thus far I remain unconvinced.

Anglo Irish Bank was set to get a bailout to the tune of 1.5 billion Euro. This couldn’t be arranged in time to save the bank and they have been nationalised, the speed of their fall from grace tells us at least some basic facts:

Anglo were not the strongest bank in the bunch, I won’t get into balance sheets, loans, impairments or anything else, the mere fact that they fell first …

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Uncharted territory – or maybe we just can't see ahead?

Often companies and economists make forecasts and predictions about the direction of the economy, so it is interesting that two of the largest banks in the UK, Nationwide and Halifax, have decided to scrap any forecasts for 2009. They will continue to give their monthly figures regarding house prices and statistics but gone are the predictions. Halifax said they couldn’t give predictions because of their merger with Lloyds, Nationwide were more brutally honest ‘We can’t because we are finding it too difficult at this time’.

The interesting date in the near future for UK banks is the 16th of January, because that is the date that the FSA have set for the end of the short-selling ban, this will result in one of two things. First is that short sellers will pile in and sentiment with order backlogs will cause a brief spike in prices -if shorts are not naked ie: you are actually paying to hold the option to buy/sell …

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Uncharted territory – or maybe we just can’t see ahead?

Often companies and economists make forecasts and predictions about the direction of the economy, so it is interesting that two of the largest banks in the UK, Nationwide and Halifax, have decided to scrap any forecasts for 2009. They will continue to give their monthly figures regarding house prices and statistics but gone are the predictions. Halifax said they couldn’t give predictions because of their merger with Lloyds, Nationwide were more brutally honest ‘We can’t because we are finding it too difficult at this time’.

The interesting date in the near future for UK banks is the 16th of January, because that is the date that the FSA have set for the end of the short-selling ban, this will result in one of two things. First is that short sellers will pile in and sentiment with order backlogs will cause a brief spike in prices -if shorts are not naked ie: you are actually paying to hold the option to buy/sell …

Read More