AIB Watch: April 4th Edition

Super Tuesday turned out not to be so super at giving us a better picture of what’s going to happen to AIB. Indeed, I’ve been puzzling over some aspects of the announcements and coming up with a decent picture of what’s likely to happen requires a fair few calculations and assumptions. But here goes. I’ll break this up into two bits. Capital requirements and NAMA transfers first and then asset disposals second.

Capital Requirements and NAMA Transfers

Let’s take the capital requirements for starters. AIB Group’s risk-weighted assets (RWA) was €120 billion at the end of 2009. The NAMA-bound assets (originally worth €23 billion) have been held on NAMA’s balance sheet at a value of €19 billion.

It looks like this wasn’t a very accurate estimate and that there was still a lot of risk involved when this estimate was arrived at. However, it also looks as though the NAMA-bound assets have been given a relatively low risk weight on the AIB balance sheet. Why do I say this? Well, if they had a risk weight of one, then the bank would only have RWA of €101 billion after the assets were transferred. If this was the case, then the bank would then need to have €7 billion in equity capital.

However, the Central Bank’s Prudential Capital Assessment Review states that AIB requires “An additional €7.396 bn of equity capital to meet the base case target of 7% equity, before taking account of projected asset disposals.” Because more than €7 billion in equity needs to be added, this means that the projected post-transfer RWA has to be higher than €101 billion and thus that the removal of the €19 billion is NAMA-bound assets isn’t subtracting €19 billion from RWA.

I think it’s safe to operate under the assumption that the Central Bank is projecting that AIB will still be left with a small amount of equity capital after the NAMA transfers and other write-downs. If, for instance, the bank is projected to be left with equity capital of €500 million, then the Central Bank is requiring total equity of €7.9 billion, implying an RWA of €112 billion (=7.9 / .07).

I looked through AIB’s annual report for some confirmation of the limited contribution to RWA of the NAMA assets as of December 2009 and didn’t find anything (that doesn’t mean it’s not there—it’s a 324 page report.) If any of our commenters can confirm this, let me know. (Commenter Brian Woods 2 suggests that because there are end-2010 requirements, the RWA estimate involves some growth in lending. This sounds like a plausible answer. The main point here is that I’m not going to work from an RWA of €101 because that’s clearly wrong.)

The idea that AIB is left with a very small equity cushion also emerges if one works from the assumption that the first-tranche discount of 43% is expected to be applied across the board to AIB’s assets (we don’t know if this is going to happen, I’m just describing an assumption). This would imply a total haircut of €9.9 billion. The Bank has already made provisions for €4.2 billion of these losses, so this would trigger an additional €5.7 billion in losses. In addition, the Central Bank is asking the bank to make further provisions for “foreseeable losses” on its non-NAMA loan book.

Given that AIB’s starting position is that it has €6 billion in equity, this might appear to wipe out its equity capital. However, it’s been brought to my attention that my earlier comments on this issue neglected the fact that the bank will be able to get some tax back after it declares these huge losses. All told, then, it looks like the bank will be starting from a positive, but very small, level of equity capital. My suspicion is that the estimates of the pricing have been set to achieve this outcome whereby the bank is not quite insolvent.

Asset Disposals

So that’s the picture of what’s required in the absence of asset disposal sorted, sort of. Now let’s look at asset disposals. AIB’s Polish and UK operations are integrated into the banks consolidated balance sheet, with the UK outfit contributing €21 billion to RWA and the Polish bank contributing €10 billion.

Starting from my guesstimate of a post-NAMA-transfer RWA of €112 billion, these asset disposals would reduce RWA to €81 billion. The bank would then need total equity of €5.7 billion. Assuming a starting equity of €0.5 billion, this requires new equity of €5.2 billion rather than €7.4 billion. Much of the media coverage of this issue will discuss this point as though the bank “raises” €2.2 billion this way but, of course, it doesn’t raise any capital. Rather, it’s the “honey, I shrunk the bank” approach to making existing capital give a higher equity ratio.

So where’s this €5.2 billion going to come from? The plan is to raise it by selling the stakes in its foreign banks for more than their current valuations on their balance sheets.

Let’s take them in turn, starting with the “jewel in the crown” as the financial journalists like to say, the banks 70% stake in Polish bank BZWBK. Note 39 of AIB’s annual report indicates that this share is held on the bank’s balance sheet at about €1.4 billion. However BZWBK’s stock has been a star performer over the past year and with a market cap of €5.1 billion zlotys and an exchange rate of 1 zloty = 0.26 euro, AIB’s stake is now worth €2.6 billion on paper.

I suspect that this is what the Brian Carey of the Sunday Times was referring to today when he wrote that disposal of the BZW stake would “raise up to €3 billion”. However, you don’t get to take in this money and then also keep the valuation of the stake in the bank as an asset on the balance sheet. So, by my calculations, at current stock prices this would constitute a gain of €1.2 billion if realised.

Then there’s the 22.7% stake in US bank M&T. The current market cap of M&T is $9.4 billion, which with an exchange rate of $1 = €0.74, values AIB’s stake at €1.6 billion, which is more than the €1.282 billion that it is currently valued at on the balance sheet according to Note 35. So not much gain there. However, as I noted last year, AIB’s accountants tell them that they can write up their goodwill because of this sale. Commenter Tull McAdoo places this at €700 million, so let’s go with that.

These figures suggest gains of €2 billion from the Polish and US asset disposals if the current market values were realised. But disposing of a large block of shares often requires having to sell at a discount. Also, the UK unit is loss making, so while selling this reduces RWA, it may require taking a loss on the balance sheet.

The Bottom Line

Is that I’m having a hard time seeing the bank raise more than €2 billion from asset disposals and it may be a good bit less. (There are other uncertainties–I don’t claim to be an expert in the prognosis for the Polish stock market.) So meeting the €5.2 billion target for equity may require an almost full conversion of the state preference shares (and perhaps also the issuance of new government ordinary and/or preference shares to meet the 8 percent “core Tier 1” requirement.)

One might imagine at this point that if the bank has shareholder equity of €2.2 billion, that a conversion of preference shares would give the government a 56% stake (3.2/5.7). But what actually matters for the ownership stake is what fraction of the bank €3.5 billion would buy at the prevailing share prices at conversion. With further losses to come that are most likely above Central Bank’s “foreseeable losses”, this bank is likely to continue to trade at a discount to book equity. Furthermore, AIB is highly unlikely to be able to pay out on the govenment’s preference shares in May, so this will be a €250 million ordinary share stake will pass to the government. (Again, thanks to Tull for this point, which I had omitted.)

So, that’s my take: AIB heading for seventy to eighty percent state ownership unless some pretty serious rabbits are pulled out of hats.

I’d note that this is a particularly numbers and assumptions intensive post, so I’ll happily take corrections on any of the calculations above.

42 replies on “AIB Watch: April 4th Edition”

Interesting. I would prefer if they don’t sell their share in the Polish bank unless they absolutely have to as it’s doing well, and it keeps the economy more diversified for the future. It could act as a kind of shock absorber for future Economic hits (hits that don’t effect Poland but effect us)
I see Poland’s economic growth as better than EU average over the next decade.

@Karl Whelan – “So, that’s my take: AIB heading for seventy to eighty percent state ownership unless some pretty serious rabbits are pulled out of hats.”

Hard to disagree but no doubt they will try and drag it out until the end of the year.

@ KW

Good post. However, I gather there is also a goodwill release of about 700m on the sale of M&T. This adds about 600-700m to tangible equity. Remember core equity=book equity -intangibles. So if you sell a sub you convert the book equity+intangibles into cash. Therefore the gain on disposals increases to 2.3bn. The bank may also have further small “gains” from bond buybacks and some movements in the AFS reserves. However, it seems to me that the bulk of the 3.5bn prefs may have to be converted to equity. In addition, AIB will almost certainly not be able to make a cash payment on the NAMA prefs, so there will be further dilution.

Bottom line, the state will end up getting about 70-75% of AIB for no further cash outlay. This could only be lower if individuals and institutions are allowed participate in the rights issue. It is worth noting that the process of shrinking AIB is going to long drawn out due to i)search for a buyer and ii) regulatory approval.

It will leave AIB as an irish bank with 70bn-75bn of RWA making about 800-900m net profit. In about 3-4 years, that should be worth about 8-9bn?

Thanks Tull.

Do’h, the Goodwill, the Goodwill, how could I forget about the Goodwill? Sure didn’t it generate my favourite post title from last year?

And the payouts to the preference shares, sure haven’t we been discussing them to death here? I’ve gone back and changed the post to include these points, with acknowledgement.

I won’t take up the question about what AIB may be worth in 3-4 years but it’s an interesting one.

@ Tull

In relation to “gains” from bond buybacks, since the government seems determined to keep AIB listed on the market and honouring all its obligations, would you sell AIB subdebt at a discount if you were hypothetically offered such a deal?


these latest bond buybacks are a gimmick, an a/c trick of the loop. You switch your old subbies for new subbies with a higher coupon. There is not much left in AIB anyway & its mostly Tier 2 which trades closer to par.

There is some in BOI-hence rumours of a debt equity swap at the T1 level

“My suspicion is that the estimates of the pricing have been set to achieve this outcome whereby the bank is not quite insolvent.”

I think you have the DoF bang to rights. It looks like the time-hallowed routine: “This is the answer. Now produce the numbers that will generate this answer.”

However, are we not perhaps “sweating the small stuff” here? AIB and BoI were never going to be allowed to be anything other than “Irish” banks – regardless of how much it would cost. These banks will claw their way back to profitability on the backs of their Irish customer bases. EBS and INBS are piddling little nuisances. Anglo, already much discussed, is another matter. And, with the implosion of Quinn Insurance looming, really stretches the state’s balance sheet.

A change of government might allow the Anglo contagion to be ring-fenced and the bond market to be faced down, but, in the absence of this, the drag on the taxpayer – even if, in Governor Honohan’s words, it is “manageable” – will continue.

Is it not time to release the equity buried in various state and semi-state activities – yielding spectacularly inadequate returns – to back out the state’s requirement to invest equity in these banks – and, possibly, in the insurance business?

@Karl I think we can be absolutely sure that all NAMA bound assets are risk weighted 1. The figures nearly reconcile, I suggest a couple of additional factors which may close the loop, NAMA subbies will have risk weight of 1 and maybe the projections are for 2010 year end in which case there might be some natural growth in RWA. It doesn’t seem important.

I think Tull’s assessment looks pretty credible, I am trying to work out what the implications are for the share price if AIB moves from minimal equity to a diluted €8bn – €9bn in 3 to 4 years.


I do not thinl equity will rise to E8-9bn in three years. Its much more likely that economy recovers, loan loss charge falls to normal levels of about 300-400m per year. After tax profits should be around 800m-900m plus per year. Put that on a P/E of 10x and you get to 8-9bn value.

“Put that on a P/E of 10x and you get to 8-9bn value.”
You are conflating company price with equity capital. They are not, as far as I am aware, the same thing.


read post again…line 1. I know is it sacrilage to say that in 3 -4 years time when economy recovers (more heresy), the stock market will value AIB at a premium to its equity.

Sorry about that, you’re quite right. I read the first sentence and all the rest, but not the last word (substituting ‘equity’ in my head for it).

Yes, I agree that it is the case, in fact, I’d go further to say that banks will revert to their higher 12x profit multiple for price.

I’m not sure that the slimmed down utility banking systems will make the same level of profits. In 1997, AIB made 600 mn euro, the most an Irish company had ever made. By 2006 it was making 2.6 bn. It’d require an analysis of where the company made its profits and whether those were likely to continue, going forward, like! Or is this what you are basing 8-900 mn on?

@ tull mcadoo

Maybe I’m reading this incorrectly.

“…loan loss charge falls to normal levels of about 300-400m per year. After tax profits should be around 800m-900m plus per year….”

Are you saying the loan loss provisions normally represent 37.5% to 44.4% of post tax profits?

It would be a percentage of loans, not profits. Don’t know what it is normally, though. Again, judging by the last ten years will be difficult.

@ yoganmahew

I agree. One would normally expect loss provision to be expressed as a % of the loan book.

However, if tull mcadoo’s suggestion (and I’m not saying he has stated some matter of fact) is correct, given the sensitivity of post tax profits to loan loss provisions the profits could be virtually wiped out by (say a doubling) of “normal” provisions. No?

Are we heading for “normal” conditions over the next five to ten years?

There’s still an awful lot of deleveraging to come.

@ Greg,

yogan is right, in a normal economy a normal bank should have annual loan losses of 0.2-0.5% of loans. I went to the top of the range for here give the deleveraging you speak of. It’s a forecast too, not a matter of fact.


I am assuming a utility banks makes a ROA of about 1% on an asset base of 80bn-maybe you would reduce that by a quarter. This seems to be the level internationally, although there is a wide dispersion. Quite frankly, if they make less than 0.5% ROA they are mismanaged.

@ tull mcadoo,

So if I understand you correctly here. At 0.5% (top of normal range) loan loss provision on a book off €80bn we get €400m loan loss provision? (not a matter of fact accepted).

Would this be the book remaining after NAMA transfers and before any new lending?

@ greg,

Bethca management would think its half that. This would be the book post NAMA. I don’t think there will be much net new lending…say 2-3% growht per annum normal. It ain’t gonna be much fun for a banker in the new normal. It will not pay as well either. Your average loan officer is goin back froma 320 to a Passat.

@ tull mcadoo

“Bethca management would think its half that.”

Quite. My difficulty is (and I don’t want to right about this) the only way we get a return on the investment in AIB, now that it looks as if the prefs @ 8% will disappear, is if the bank returns to “normal” post NAMA even if loan loss provisions are in the upper range for normal.

As you say net lending growth might be 2%-3% per annum. So because there will be little new business the book will age more rapidly. Yes?

There are then two impacts on loan loss provision which I think would push the number outside your range.

One. Healthy new business growth has the effect of diluting the percentage provision required. In normal times loans would not be expected to become impaired for (what) a period of 4 to 5 years.

Two. The post NAMA book is already impaired beyond normal but management have made no effort to recognise the impairment. How can they?

As I say I don’t want to be right but I think “normal” profits, taking your 1% return on assets, will be under severe pressure, for perhaps four to five years, while the ageing book offers up its dead so to speak.

There will be every incentive for the bank to invest in short and medium term government securities and indeed every incentive for the government to allow this.

Let’s hope your right and we can look forward to selling a 75% stake for €6bn.

Given our experience of the behaviour of banks and government to date I do not share your optimism.

@ tull

Your erudite and technically informed contributions are appreciated. You say, however:

‘I know is it sacrilege to say that in 3 -4 years time when economy recovers (more heresy), the stock market will value AIB at a premium to its equity’

That is not heresy, but it is in the face of increasingly adverse trends in company liquidations, employment and credit supply, among other indicators.

Can you outline very briefly the form your postulated recovery might take ?
Which sectors in our economy have, in your view, the potential to drive it ?
What do you see as the prospects for growth outside the FDI sector ?
Do you expect a recovery process to impact significantly on employment ?
Do you have reason to anticipate a loosening of consumer credit provision, or a recovery in consumer confidence ?

It seems likely that the value of AIB will hang on the answers to questions of that sort.

All fair enough so far.

The one serious danger I see is price and quality competition. There seem to be two markets in Ireland of debt, roughly speaking the prudent and the bubble. The prudent are currently on trackers, have sold up, or have not bought yet. The Irish banks will have to charge a peg-up over euribor for variable rates, will be scared of trackers, will have higher loan losses (for the bubble loans) etc. In short, they will be expensive for the prudent.

The state probably won’t let them distinguish much by loan quality for a good while, so even their discount rates for low LTV will not be great. So there will be an opportunity for net savings banks to build a new loan book, with solid borrowers at low LTV, in a market that is, historically, at least reasonable value.

Without these borrowers, the Irish banks won’t be able to build in the lower LTV requirements to help with a AAA rating on new issues of covered bonds. At least, not without a crippling level of over-collateralisation. This will severely crimp their ability to lend going forward.

Add to that, a pox-ridden loan book as they end up lending out riskier loans just to meet their targets.


@ Lads

3 years ago the consensus was bulllish & wrong. Now you are now allowed be constructive without “witch” being shouted (yourselves not included) Always look for the consenus & look to bet against it.
To defend my less bearish view let me put forward the following
*employment/liquidations etc are lagging or coincident at best.
*forward looking indicators such as the NCB PMI for industry are looking up
*international lead indicators are also looking up & we are the most open economy going
*Sterling may have troughed-who knows. A strong $ is positive for us
*NAMA willimporve the liquidity situation at the banks
*there is a roadmap to recapitalisation
*I believe QE will lead to a pick up in inflation which will inflate some of the debt away

I would be even more bullish but for the deadweight of debt. I still think, I have made some allowance in my guess for normal earnings (50ps of loss). There is a risk that your collective view is broadly right but it is now the overwhelming consensus. you never know the economy might actually be more resiliant than people think.

Oh, I doubt my view is the overwhelming consensus!

I’ve seen financial and banking crises first hand in other countries. The bounce-back is uneven and deeply scarring. Many people end up just scrapped. Many of the rest live and work in a state of frenzied fear. Social consequences lag for a long time.

Don’t stop the responses, though. So far there’s nothing glass-half full about what you’ve said, it is, as far as my amateur eyes can see, a reasonably view of where we might go.

Eventually we’ll hit a green light, there has to be a green light!

@ tull mcadoo

I dislike consensus. It is generally ignorant and wrong.

So whether the consensus is bullish or bearish is of no concern to me.

What concerns me is the manufacturing of consensus by propaganda.

The Minister is now playing the last card of the gombeen.

“Jaysus it was bad. But I’ll tell ya one thing boys. Now is the time to buy.”

It may have escaped your notice but it did not mine.

I can see no authority for the Minister of Finance given under the Constitution to behave as a small town cattle auctioneer.

I would prefer that the Minister concern himself with ensuring that the Citizens have sufficient information to be in a position to judge the behaviour of the government and the bankers.

Most particularly I would like to think that the Minister is not behaving as a rally monkey for the property market and would instead release the advice given to Alan Dukes on why Anglo Irish Bank should continue.

I’ll get back to you on the rest.

@ tull

Fair enough, but which consensus should we bet against ?

1 The Washington (Globalisation and Free Markets) Consensus, as analysed by Stiglitz and others
2 The local ( angry) consensus. Get me outta here.

A genuine conundrum with no easy solution methinks. Luckily we have the Irish

A number of commentators have cast doubt on the wisdom of selling Zachodni – best performing asset, jewel in the crown, growth there may offset domestic (Irish) losses.

The current market value of the stake is known. The value of that stake to the Irish taxpayer is known – it is the cost of substituting government borrowing, at 4.5% currently, for the funds which would otherwise be generated by a sale.

If any posters wish to publish their estimates for, say, the performance of 1) the Polish economy, 2) the performance within that of Zachodni, 3) the performance of the Polish stockmarket (in valuing Zachodni) and, finally, the likelihood of AIB managing it properly, all of these over a 10-year period, please feel free.

Personally, I think the State here has quite enough domestic banking exposure and uncertainty without adding Poland to the mix.

Incidentally, KW, Bloomberg carried a story last week that a bidding war is breaking out for BZWBK, linked below.

@ tull mcadoo

“*employment/liquidations etc are lagging or coincident at best.”

This is not a manufacturing recession. It is a credit deflation recession if not depression.

@ tull mcadoo

*forward looking indicators such as the NCB PMI for industry are looking up

Was there in the past ocassion on which “forward looking indicators” were wrong?

Can NCB provide outcomes against forcast for the last five years in one simple graph?

@ tull mcadoo

*international lead indicators are also looking up & we are the most open economy going

If the global economy picks up are we looking at 50,000 jobs based on Irish exports being created over the next five years?

I don’t see it. The world has changed. We have a lot more competition in that space now.

@ tull mcadoo

*NAMA willimporve the liquidity situation at the banks

Whit the discounts being applied?

What is the roll-over of debt for AIB & BofI?

Even if they have no problem raising funds at what price?

tull mcadoo
I hope you are correct. There were many examples of consensus: that “we” never knew that banks could lose money, and that houses could ever fall in price, etc.

The depression is world wide, except for the BRICs. If they hold onto their own capital for once, not losing it to the developed world as usual, then they may escape the asset deflation that is a consequence of the capital destruction in the first world.

Many more jobs will be lost and incomes will fall. I mean the FIRE sector. Across the first world. New jobs will take a decade or so. We simply have no needs. Infrastructure will blossom, but job losses will dominate.

This is a most informative and thought provoking thread. However I was intrigued by the implications of the various scenarios being debated for the share price of AIB. I decided to pull the information together and see where it lead.

Taking the figures arrived at by Karl, these show core equity post disposals of c2.2bn. If the risk-weighted loan book is 80bn or thereabouts, allowing for some growth, a 7% capital ratio requires 5.6bn of capital. If we make an allowance for a further loss next year prior to return to profit, 6bn is a reasonable target. This requires new equity of 3.8 bn. By an elegant co-incidence, this closely matches the government prefs plus the accrued dividend (totalling 3.75bn).

Now, if this is converted at the current share price of 1.25 per share, 3 bn new shares will be added to the existing total of 918m leaves the state with 77% or thereabouts of the enlarged equity.

If, as suggested reasonably by Tull, a profit after tax figure of 800m-900m is achievable once the rot is cleansed out, and a value of 8-9bn is achieved in the market, this translates into a share price of 2.04 – 2.30 at that time.

However, there are several issues, both positive and negative, to consider also in looking to such a future performance.

First, the biggest uncertainty is the amount of losses remaining in the loan book. Management needs to restore trust as a matter of urgency. Further dilution of shareholders may be needed if further losses emerge.

Second, core profits (excluding legacy loan losses) are likely to be substantially higher than normal due to the margin enhancing decisions currently being taken, general risk averseness, and more favourable competitive environment.

Thirdly, people generally underestimate trends that are against the prevailing one. People underestimated the severity of the recession, likewise the recovery will take us by surprise. Responsible decisions are being taken, capacity is available in the economy and competitiveness has improved greatly. We are well positioned to benefit from a global recovery.

I predict that bank profits will recover faster than expected. AIB could be a €10-15bn bank again within 5 years. However even this value, if achieved, would not bring the share price above €4.

@ Brendan

I would not be as optimistic as you.
AIB will end up writing off about 12-15% of its pre crisis loan book-probably taken 10% plus to date-say another 3-4bn to go. This would include a 3% plus hit on the domestic mortgage book. This is an unknown. It could be bigger, in which case AIB will be nationalised

I do not think the loan book will reprice to the extent that you think-bear in mind up to half the mortgages are trackers which will roll off very slowly and will never reprice. In addition, Irish banks are woefully short of term funding. There might be some repricing on the deposit side as they use the NAMA bonds to pay off dearer funding. However, I would not run a repricing story.

I have no doubt we are at or close to the bottom in terms of credit costs-you are not going to write off 9bn plus every year before provisions!!!!

2 euros in 2014 does not seem unreasonable. Put it another way the state either has to put another 3bn to recap AIB post nationalising it due to the collapse in mortgage asset quality or it gets back about 3bn from its sale of its stake in 2014. “Head or Harps”

Now who’s being bearish!

“It could be bigger, in which case AIB will be nationalised”
I don’t think AIB or BoI will be nationalised. We will see the state dilute its own shareholding with waves of recapitalisation, each one for a different problem, but the 85% (or at least 90%) ‘line in the sand’ that has been set will not be breached.

In a sense, the state will already do this by sating they will convert the preference shares. They have proved costly as the coupons being issued as equity was missed from the stroke. This could just carry on, but it is safer to convert them and prevent the creeping upward percentage that the preference shares mean.

The state will be diluting itself with any equity recap of BoI, for instance.

@ yogan,

On my central case, AIB end up being 70-75% state owned and probably has enough capital to get through hte next two years. On this basis the state makes a handsome profit on disposal. However, theis is predicated on selling the assets for a reasonable number and full conversion of the prefs. However failure to sell & a return to the conditions of 2009 will end in full wont be possible to avoid. So in placing your bets you have to think of zero as a remote possibility

BofI is more straightforward. It requires lesscapital , does not require asset sales & its loan book is in marginally better condition. The odds on zero or full nationalisation are more remote than AIB.

@ Brendan Doyle & tull mcadoo


I am not Lad. I am a Citizen.

Are you the nice Christian Brothers?

“Ah now lads stop that we’ll all get in trouble”

Or are you the firm Christian Brothers? The ones that don’t believe in “lads”

“Stop that now or I’ll give you trouble”

Or are you the ruling “Lads”.

“If you don’t stop now I will destroy you and your family”

What kind of “lads” are you?

@ Brendan Doyle

“First, the biggest uncertainty is the amount of losses remaining in the loan book. Management needs to restore trust as a matter of urgency. Further dilution of shareholders may be needed if further losses emerge.”

The “biggest uncertainty”?

The unknown unknown?

“Management needs to restore trust as a matter of urgency.”


Do you mean the boards of directors of the banks or do you mean the department of finance, or do you mean Brian Lenihan?

Trust & Urgency Brendan?

Which of those two do you think is more important for a bank to have as a “core” value?

@ Brendan Doyle

Second, core profits (excluding legacy loan losses) are likely to be substantially higher than normal due to the margin enhancing decisions currently being taken, general risk averseness, and more favourable competitive environment.

“due to the margin enhancing decisions currently being taken”

I’ll take it that margin enhancement can’t really occur in the absence of competition.

That would be something along the lines of the government has done such a good job in providing competition in financial services there is no competition left?


You’ve covered that already.

“and more favourable competitive environment.”

I look forward to the competitive free flow of funds to small and medium sized enterprises.

And of course credit for everyone who wants to buy a 46 Inch Plasma TV from China.

Happy Days.

“general risk averseness”

Let me see if I get this.

The bank is risk averse and has no competition?

Happy Days Are Here Again.

Sunday Monday Happy Days Tuesday Wednesday Happy Days Thursday Friday Happy Days

These days are all happy and free

Cumman on home to you.

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