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’Another banking curate’s egg
Let’s start with positive news from Friday’s Bank of Ireland trading update.
First, earnings look to be in line or ahead of market expectations and there hasn’t been a large increase in bad debts:
Our Corporate Banking loan book has begun to benefit from the general improvement in world economic conditions.
That seeping Irish confidence – 1% per day
It’s not just the Irish sovereign that’s experienced a — erm — market deterioration.
From Suki Mann, credit strategist at Société Générale:
As a testament to the virulence of the sovereign weakness,
Snap news
Breaking pre-market news on Friday,
- Bank of Ireland sees underlying operating profit down 35-40 per cent on 2009 — statement.
- Rolls-Royce says problem with Trent 900 engine confined to specific component in the turbine area;
The likely cost of Ireland’s bank bailout
Ireland’s five-year CDS has risen above 600 basis points on Monday morning and anyone who has read Morgan Kelly’s frightening article in the Irish Times will know why.
The UCD professor pulls no punches in his latest piece.
More Anglo Irish candour
Spot the odd one out in this bevy of Irish credit spreads on Monday — chart and data courtesy of Markit:
That’ll be Anglo Irish Bank CDS taking off towards 700bps, leaving both peers and sovereign behind — and opening another exteeeended issue in Irish banking.
Snap news
Breaking pre-market news on Wednesday,
- Rok warns on profit after ‘serious failings’ in financial controls — statement.
- Standard Life profit up 10 per cent to £182m – statement.
- ING posts second-quarter profit of €1.2bn — statement.
Snap news
Breaking pre-market news on Monday,
- Emerson Electric goes public with £723m/275p a share cash offer for Chloride – statement.
- Bank of Ireland announces fully underwritten “market based proposals to raise”
Snap news
Breaking pre-market news on Thursday,
- Credit Suisse posts Q1 net profit of SFr2.1bn – statement.
- Deutsche Bahn agrees £1.6bn bid for UK’s Arriva – statement.
- Bank of Ireland in talks on rights issue – statement.
Snap news
Breaking pre-market news on Friday,
- Bank of Ireland says expects to dispose of asset management arm as part of EU restructuring arm – statement.
- Thomas Cook issues €400m, £300m bonds – statement.
CDS report: Ship of fools
Ireland has been held up as an example of a country ready to suffer pain in tackling its acute fiscal situation. Austerity – surely one of the most overused words in recent months – was embodied by its 2009 budget,
CDS report: All on Good Friday
European credit markets were devoid of momentum today as the upcoming Easter holiday and the impending US jobs report on Friday led to inertia. Investors received an inkling of what to expect from the NFP on Friday,
[Ireland's Bad Bank] The morning after…
. . . After Ireland’s new bad bank rolled out swingeing haircuts on Tuesday for the troubled loans Allied Irish Bank and Bank of Ireland want to offload on to it, that is.
And after financial regulators added tough new capital requirements for both banks.
Snap news
Breaking pre-market news on Wednesday,
- BSkyB to challenge Ofcom ruling on Pay TV market – statement, statement and report.
- Bank of Ireland says preparing rights issue and publishes results – statement and statement.
CDS report: When Irish Eyes Are On NAMA
“When Irish Eyes Are Smiling, sure ’tis like a morn in spring.” is the first line of the one of the most famous tribute songs to Ireland. While it is spring now, Irish eyes are not likely smiling as all eyes were on the NAMA and Lenihan announcements.
[Ireland's Bad Bank] Haircut, sir?
Ireland’s National Asset Management Agency (NAMA) on Tuesday announced the haircuts it will impose on toxic loans submitted to it by Irish banks, including Allied Irish Bank and Bank of Ireland.
Too large a haircut would leave either bank with a capital-raising dilemma,
[Ireland's Bad Bank] A primer [updated]
Interested in Ireland’s new bad bank? Well, here’s a timeline for Tuesday’s announcement and a handy list of things to look out for. All times UK.
(H/T a leading City banks team)
4.30pm – A short press release is expected from the National Asset Management Agency (NAMA).
CDS report: A turn in an era?
Events in history come in big and small packages. Sometimes these moments come as flashpoints; sometimes they are more subtle. Two of today’s headlines seem to be small and subtle shifts inside of a larger era in financial markets history. First,
[Ireland's Bad Bank] Allied Irish Apocalypse
And to think NAMA was meant to restore confidence in Ireland’s banking system. Not in the short term, perhaps.
Allied Irish Bank executives must have had a fun weekend, having apparently exhorted the government not to raise haircuts on the loans they want to send to its bad bank — enough to leave AIB requiring government recapitalisation.
Snap news
Breaking pre-market news on Monday,
- UAE stock market opens 5.9 per cent down – FT.
- Mitchells & Butlers notes press speculation regarding “increasingly difficult relationship” between Board and some shareholders – statement.
Hybrid debt attack, from Moody’s
Perhaps genuinely expected by the market this time — a Moody’s downgrade of Lloyds, RBS, Allied Irish Banks and Bank of Ireland subordinated, or hybrid, debt.
On the UK side:
London, 09 September
Snap news
Breaking pre-market news on Friday,
- Bank of Ireland sees impairment charges of €6bn in 3yrs to 2011 – statement.
- Friends Provident completes demerger of stake of in F&C Asset Management – statement.
Recapitalising the Irish banks
Allied Irish Banks market cap – €828m
Bank of Ireland market cap – €572m
Irish government’s capital injection – €3.5bn for each bank
Despite the discrepancy, the Irish government said today that,
CDS update: What Obama bounce?
This CDS report was written by Markit’s Gavan Nolan
Hope, optimism, expectation and, of course, change. Today’s inauguration of President Obama has generated a torrent of positivity in the media, with those four words unavoidable.
Irish banks plunge on nationalisation fears
Shares in Allied Irish Banks and Bank of Ireland halved on Monday amid investor fears that the Irish government may be forced to nationalise the two largest domestic lenders. Bank of Ireland shares fell 54% to 34 cents while AIB fell 58% to 60 cents and Irish Life & Permanent,
Ireland invests €5.5bn in main banks
The Irish government has announced it will invest €5.5bn ($7.6bn) in the country’s three main banks, which will see it take an effective 75% stake in Anglo Irish Bank. The investment is in the form of perpetual preference shares,
Buy-out groups eye Irish banks
Apax Partners has joined a handful of private equity groups running the rule over the cash-strapped Irish banking sector, as the UK-based buy-out house considers a politically sensitive investment in Bank of Ireland.