Shifting ownership of Irish banks

Given the current interest in ownership of the Irish banks, I thought readers might be interested to read about the size distribution of shareholders.

AIB provides the most interesting data, reported in their recently published Annual Report and relating to end-December 2008.

There have been some interesting shifts in the past year.  First of all, shareholders in the Republic (including pension funds etc.) now hold 41 per cent of the shares, up from 37 per cent last year.

Second, in the face of dramatic declines in price and increase in volatility, the number of AIB shareholders has increased by over 10 per cent or 10,000 persons.  Almost all of the increase relates to the Republic, and almost all hold less than 5000 shares.  (Today, the shares closed at €0.81).  This confirms what was known anecdotally, namely that lots of middle income people thought it worth taking a flutter on bank shares given the novelty that they were only worth cents.  They have bought these shares from foreign institutions.

For, although there over 90,000 AIB shareholders in total, of whom 76,000 in the Republic, fewer than 5000 shareholders hold more than 10,000 shares, and just 384 hold more than 100,000 shares.

Bank of Ireland had about 80,000 shareholders when it last reported the number, about a year ago.  (We’ll likely see a similar pattern to the changes when the March 2009 figures are published.)

A look at Irish Life and Permanent‘s reports (giving shareholders at end March 2009) shows a similar, though smaller trend: they now have over 135,000 shareholders up about 1%.  All but 10,000 of them have fewer than 1000 shares each, but most of the newcomers seem to have between 1000 and 10000).

Anglo Irish Bank had far fewer shareholders — fewer than 20,000; just over 100 of them held 85% of the total shares between them.

7 replies on “Shifting ownership of Irish banks”

The shift in AIB shareholders is consistent with comments last night on the Vincent Browne TV3 news by Paul Somerville (Head of Private Clients at a group called Delta Index Wealth Management) . He says it was common knowledge in 2006 /07 in the City of London that the Irish banks were in trouble and he advised clients not to buy and was happy to see them shorting the banks.

The figures for Anglo-Irish shareholdings put a serious question mark over claims that it is systemically important. What share of its loanbook is accounted for by the 100 shareholders who held 85% of its shares. If Anglo’s business was dominated by a group of 100 – 200 shareholders/ borrowers, how can it be suggestion that it was systemically important?

@Lefournier Anglo took advantage of the ‘Northern Rock’ effect. The trick is to sail so close to the wind that even the slightest ripple in the financial pond will cause a catastrophic failure of your business model.

By being first to the trough, as Northern Rock was in the UK, Anglo got the salvation they needed. If Anglo was to turn up at Dail Eireann today, now that the government’s perceptions are starting to catch up with the reality of the situation, one hopes they would get directed to the high court and the examiner’s office.

@Patrick Holohan. The city (no longer deserves the capital C) have Irish banks tagged as ‘penny dreadfuls’, a moniker normally reserved for AIM listed small cap mining/oil explorers. Perhaps the city is being generous though, little chance of the banks striking oil any time soon.

Why are the large investment institutions not calling for major changes at AIB & BOI. Surely they should be leading the charge to restore these banks to profitability in the hope of salvaging some of their losses.

Could it be that they have already decided to cut and run.

@ Lorcan
Yes as with Northern Rock, you can only pull that trick once. But AngIB has such an interesting client and shareholder base. I have mentioned BCCI before? Some banks have to be buried deeply.

The trouble with crooks: they won’t stay bought. How come we never found a money laundering bank in Ireland? All those drugs, guns and exotic dancers. All big international trades. Thank God they never got to Ireland……

@Pat Donnelly
Such a terribly cynical view of the world. The situation is rarely as bad (or as good) as portrayed.

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