Shotgun Mergers Between Our Banks

Let us remind ourselves.

AIB Hi 23.69 Now 2.11 -91%
Anglo 17.53 to .91 -95%
BoI 18.25 to 1.22 -93%
ILP 22.69 to 1.09 -95%

Maybe this is all due to FUD or just maybe there is something wrong. The banks are undercapitalised if the markets think they are as the term is a subjective assessment of future possible shocks.

I know we cannot discuss individual stocks but one of the above remains an enigma as its CEO keeps protesting:

a) It has "capital in spades" and indeed its ratios appear far above even the current market demands. What gives here?

b) It has no exposure to commercial or resi development.

c) It has a life company asset which appears even on conservative assumptions to have a value many times the market cap of the group.

Page 2 on Ths Sun(I know the Sun) states the staff at Anglo Irsh Bank are to receive Xmas bonuses from 5k to 8k.

Our banks must be ok after all. (If it's true of course)

webtax said:

I don't think its correct to call any of the above allegation or 'FUD'. The fact that the banks are all in difficulty is common knowledge, but the extent of their problems cannot be known exactly as the government is not publishing the PWC report.

The media reports on it indicate that some merger activity is high up on the government agenda. The consequences of this major financial decision that will impact on all shareholders, taxpayers & consumers should be freely discussed by whoever wishes to.

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Webtax, I didn't say everything in th message is FUD. If you look at the parts of Brendan's message that I quoted you will understand what I refer to.

Thanks,

DubGus

webtax said:

From media reports today it looks like the barbarians are at the gate.

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Everybody is agin' these private equity folk.

Labour as an ideological knee jerk, Enda trying to score cheap points, the bank executives out of self preservation.

We can dismiss the above objections but the media is universally opposed, the Sunday Tribune went so far as to scream "No, No, No".

Are we missing sumfin'? Anybody got anything good to say about the involvement of private equity?

BTW are we really interested where Sam Maguire was born. I'll throw up the next time I read that.

Duke of Marmalade said:

the Sunday Tribune went so far as to scream "No, No, No"...
Anybody got anything good to say about the involvement of private equity?

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You'd have plenty good to say about it if:
1. you are a bank director hoping to hang on to your job which won't happen if govt provide the funding
2. you are a member of govt so obsessed with national debt as to be blind to seeing that borrowing at 5% and getting 10% back from the bank makes sense
3. you work on managing the national pension reserve fund and would not like to have attention drawn to the losses on the funds under management which could be used in the bail out
4. you are the private equity sharks about to get a nice big feed in Ireland

Besides that the Sunday Tribune has it right...

does this mean that if boi and ptsb were to merge ptsb would be gone altogether and all accounts would be transferred to boi? would there be no more ptsb operating in this country at all? i like ptsb. if i am forced to switch to boi in this way i will close all of my ptsb accounts and go elsewhere. there will still be foreign banks here. i am not going to do business with boi by the way, i don't like them at all. my family have said the same. if people like me do this they will loose a lot of business...

merging banks is not in the banks interest, the taxpayers interest or the states interest, the only groups that would want this are the private equity groups who want to capture as much market share as possible with the input that they have.

merging companies isn't as simple as waving a wand and saying 'now it's done' it would take a long time, the changing systems would have a paradox of people getting fired while service grinds to a halt as well, at any time at least 50% of the people doing the job would be doing so on unfamiliar systems.

Two contrasting views on private equity:

[broken link removed]

http://www.independent.ie/business/...ing-as-private-equity-firms-loom-1554662.html

Including the following worrying comment:
"When the dust has settled in a few years, [broken link removed] will have experienced one of the largest property booms and busts on record.The downturn in property will be associated with one of the largest cumulative drops in national income in an advanced economy since the Second World War. This contraction will have coincided with the worst global financial crisis and economic recession since the Great Depression. How could it be even remotely plausible that Irish banks will escape this economic and financial carnage with losses comparable to those experienced during normal recessions?"

Is the proposed combined investment of the group of Irish Fund Managers and Irish Government as an alternative to private equity in the bid for Irish Banks an option that would protect existing shareholders and provide the possibility of recovering some of the lost shareprice ?

upport said:

Is the proposed combined investment of the group of Irish Fund Managers and Irish Government as an alternative to private equity in the bid for Irish Banks an option that would protect existing shareholders and provide the possibility of recovering some of the lost shareprice ?

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UK experience suggests that Government intervention will be at shareholders cost.