Irish Banks Approach Armageddon

edwinac_2

mickW wrote: »

4.40pm Friday 5th December 2008 Anglo Irish Bank now 51 cents approx 42pence Oh dear looking bad for depositors in the UK

Down to just 28 cents mid-trading yesterday (Weds, 10 Dec).

irishtimes.com wrote:

ANGLO IRISH Bank lost almost a quarter of its value yesterday, falling sharply for the third day this week.

The bank's share price dropped to 28 cent in trading before closing at 33 cent, its lowest price in more than 13 years and down 23.2 per cent on the previous day's close...

Anglo's shares have dropped 64 per cent since last week when the bank reported a 37 per cent fall in annual profits to €784 million and an almost ninefold rise in bad debts. The bank also revealed it had an additional €6.5 billion in loans - 8 per cent of the €73 billion loan book - to the development sector from six months earlier.

The writing is on the wall for the Anglo Irish. There isn't a hope in hell's chance of raising enough cash in the proposed Rights Issue to keep the bank afloat and independent.

The end is nigh. The City of London strikes another fearsome blow against Irish financial sovereignty. Did anyone really think that the outcome would be any different?

Hopefully for depositors, consolidation of the Anglo Irish tiddler by one or more of its London-based rivals will be swift and seamless.

Chalk it up as another casualty of the rapacious British Empire.

Andrew64

So AIB closed at 33 Euro Cents!

http://www.independent.ie/business/stocks-markets/anglo-irish-plumbs-new-depths-with-shares-worth-just-33c-each-1570525.html

In theory, the share price should not matter if the bank still has plenty of assets, but in practice it's a bad sign. After all, it was the end of the road for B&B when it reached 20p. AIB will either be nationalised or merged with another bank. It's unlikely to go bust.

malc1603

http://www.independent.ie/business/irish/the-share-price-collapse-at-anglo-irish-bank-appears-to-mark-end-of-the-road-1573685.html

Probably a stupid question but I take it it wouldn't be a good idea to open a fixed rate bond here?

Andrew64

From the above article:

"While the index of Irish bank shares has fallen by 'only' 94 per cent since May 2007, the Anglo share price has fallen more than 98 per cent over the same period."

After my experience with Icelandic banks - I got my money out of KE just before it went down - I'm glad I decided not to put any money in an Irish bank!

masonic

malc1603 wrote: »

Probably a stupid question but I take it it wouldn't be a good idea to open a fixed rate bond here?

Given that you can get the same rate elsewhere, you'd have to be pretty brave to choose Anglo at this point in time.

masonic

Andrew64 wrote: »

After my experience with Icelandic banks - I got my money out of KE just before it went down - I'm glad I decided not to put any money in an Irish bank!

As a KE customer myself, I hardly noticed its demise. I can only hope the situation with Anglo follows a similar course.

malc1603

masonic wrote: »

Given that you can get the same rate elsewhere, you'd have to be pretty brave to choose Anglo at this point in time.

It says on their website if you enquired about the 5.75% bond before they lowered it to 5% then you will still get that rate -so long as they get the form back by Friday. Not sure if I want the uncertainty or worry though!

soulsaver

It's like this for me: I think your money would be safe 'cos of mergers, fresh capital, nationalisation etc. Having said that I wouldn't put new money in... in fact I could have got 7% fix at the end of Nov from an earlier pre registration, and decided agin it.
But I haven't claimed 'emergency' and asked for early redemption on my ftb maturing Feb, either.

ed123_2

...Irish government announced a 10 billion euro recapitalisation plan today...

gozomark

http://news.bbc.co.uk/2/hi/business/7782860.stm


Irish banks to be recapitalised







The Irish government is to provide a fund of £9bn (10bn euros) to recapitalise all its listed banks.
The money will be available to AIB, Anglo Irish, Irish Nationwide, Irish Life & Permanent and Bank of Ireland, which owns the Bristol & West bank. However before any money is paid out, the banks must await the outcome of the most recent rights issue.
If private investors choose not to step in, then the state will have to provide the money instead using the fund.
Finance Minister Brian Lenihan told RTE News: "Some financial institutions are so embedded in our economy, in terms of their borrowing and in terms of their deposits, that they are of systemic importance to our economy.
"It's very important that our banking system is seen to sustain our economy and support our economy."
Bank of Ireland and AIB shares have fallen 92% and 88% respectively this year.
Banking fears
The Irish government said the objective of making the fund available was to ensure the long-term sustainability of the banking sector.
It pledged to secure the interests of the taxpayer through appropriate terms and return on the investment.
The Department of Finance said the state may use money from the National Pension Reserve Fund. The move would help boost the flow of funds to the country's struggling economy, it added. BBC business correspondent Joe Lynam said that, as a proportion of its economy and banking sector compared to the UK, the Irish bailout represents an even bigger capital injection than Britain's.