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This morning Bank of Ireland has reported a per tax loss of just under €1.25 billion for the first six months of the year. This time last year the loss was €668 million. However the massive loses are due to the €1.8 billion the bank had to set aside to cope with current and future losses from band loans.
Of the €1.8 billion set aside, €900 is linked to loans BOI have or plan to transfer to NAMA (National Asset Management Agency). The other €900 the bank is for other bad loans.
Bank of Ireland post €1.25 pre tax loss.
Richie Boucher (Bank of Ireland CEO) believes this is the peak of loan losses the bank will suffer and that losses will start falling and will normalise by 2013.
Aside from loan loss charges, profits were down 32% to €553 million. Costs have been cut by 3% according to the bank which plans to increase it’s cost curring measures by letting 750 staff go over the next two years.
Bank of Ireland still appear uncertain about the final discount on loans it needs to transfer into NAMA. However they have stuck to their estimate of a total loan loss of €4.7 billion of a three-year period which ends March 2011.
According to http://www.bloomberg.com/ Bank of Ireland shares are down as of 10:36 are down to 0.843 per share, -0.24%.
National Irish Banks have today posted a pre tax loss of €341 million for the first half of the year.
However the bank which is owned by Danske Bank Group were forced to set aside loan impairments of €367 million.
Nation Irish Bank, slowly starting to recover.
Taking into account the forced loan impairment charges NIB have essentially reported a €26 million operating profit which is down 32% from the same period last year. Income has fallen 17% to €84 million thanks to reduced customer demand. Costs have fallen 6% to €58 million.
“These results reflect the continuing difficult economic and banking market conditions. Our focus is on completing the restructuring programme we started last year and our work in this regard is on track,” NIB chief executive Andrew Healy said.
Mr Healy said National Irish Bank had no plans to increase mortgage rates at this time.
“These are tough times to be operating a bank in Ireland and we are fortunate to have the unflinching support of a strong parent in Danske Bank. We have taken early and decisive action to reduce our costs and to reposition National Irish Bank for a market which is being radically reshaped.”
NIB’s loan book stands at €10 billion currently, which is down 5% compared to this time last year. Commercial property loans make up a large portion of it’s loan book at €3.3 billion. Unsurprisingly this area sees most of the the loan impairments of €367 million.
However while these figures seem poor they are going in the right direct. NIB in 2009 made a pretax loss of €661 million, which Mr Healy described as possibly “the worst year in Irish banking history”.
NIB’s parent bank, Danske Bank has strong figures to report. Despite setting aside more than €1 billion for loan impairment charges, recorded a profit of €420 million in the six months to June 30th.
Source: RTE.ie
Senator Ivor Callely’s expense claims are to be discussed by the Seanad’s Members’ Interests Committee later today.
The committee was due to meet again later this month, but that has now been brought forward to consider more allegations surrounding his expenses.
Senator Callely issued a statement over the weekend relating to claims made for mobile phones with invoices from a company that had ceased trading.
Controversy over expense claims
The Dublin senator said he submitted four receipts for mobile phone expenses ‘in good fath’, but acknowledged the claims shouldn’t have been made, and said he had now refunded the monies to Leinster House.
Last month Senator Callely was suspended from the Seanad for 20 days after members found he’d misrepresented his normal place of residence as West Cork instead of Dublin for expense purposes.
Speaking in Tullamore in Co Offaly yesterday, An Taoiseach Brian Cowen said Senator Callely’s statement raised more questions than it answered.
Source: online.wsj.com
DUBLIN (Dow Jones)–Allied Irish Banks PLC (AIB) Wednesday reported a deeper first-half net loss due to provisions for bad debts related to unpaid property loans after the collapse in Ireland’s construction sector.
“Business and market conditions remain challenging,” AIB said in a statement. It expects a cumulative non-National Asset Management Agency credit charge of EUR2.9 billion for the three years from 2010 to 2012.
AIB posted a net loss of EUR1.73 billion, deeper than the EUR786 million loss for the same period in the year earlier
At 0740 GMT, AIB stock was down 8.9% at EUR0.90 in Dublin in a flat overall market as the bank says the environment for operating income generation remains difficult. The stock is down from EUR19.04 three years ago. There was no interim dividend.
The government’s stake in AIB recently reached 18.6% and the bank’s core Irish business continues to face challenges from weak consumer demand and higher costs of funding, as the bank fights for its survival as an independent entity.
For the six months to June 30, AIB posted a net loss of EUR1.73 billion, deeper than the EUR786 million loss for the same period in the year earlier.
First-half basic loss per share deepened to 163.7 cents versus a loss of 43.2 cents a year earlier. The adjusted loss per share deepened 19% to 195.3 cents versus 164.4 cents a year earlier.
Total operating income fell 24% to EUR2 billion, excluding EUR963 million in NAMA losses, from EUR2.78 billion a year ago and the bank posted a pretax loss of EUR1.06 billion, excluding NAMA losses, versus a loss of EUR872 million a year earlier.
AIB received a EUR3.5 billion government recapitalization to help offset its bad debts in return for 25% voting rights. Unless the bank pays the coupons on the preference shares, the state can ultimately convert its investment into a 25% stake in the bank. It must also raise EUR7.4 billion by year-end to meet its capital requirements.
AIB’s 22% stake in M&T Bank Corp., the U.S. business, is up for sale as is its 70% stake in Poland’s Bank Zachodni. The bank said plans for their disposal are at an “advanced stage.”
Alan Kelly, AIB’s general manager of corporate services, told Dow Jones Newswires, “The disposal process is ongoing and proceeding inline with our expectations and we would expect to have something more to say in September.” In relation to the sale of the Polish operations, he added, “We are in confidential discussions.”
“The Irish state has underwritten the EUR7.4 billion, and we’re working hard in terms of disposals,” he said. “The government will make up the difference in the event that we don’t raise the full EUR7.4 billion ourselves. We want to ensure that the burden on the Irish taxpayer is kept to a minimum.”
“In the fourth quarter of this year when agreements are in place, we intend to go to the equity market to raise the balance from shareholders,” Kelly added.
Last month, AIB exceeded the threshold of 6% Tier 1 capital adequacy ratio agreed exclusively for the purpose of the industry’s EU-wide stress testing exercise.
AIB recently made its second transfer to the National Asset Management Agency of EUR2.7 billion, which isn’t accounted for in these interim results, bringing its total to date to EUR6 billion–at an average discount of 45%–of an eligible EUR23 billion in loans to be transferred.
“It’s impossible for us to estimate the rest [of the discount] until the valuations are complete,” Kelly said. “There will be variability in tranches. But we expect to complete the transfers by early next year.”
Criticized loans were 33.3% of total loans, while impaired loans were 15.6% of total loans, AIB added. At June 30, 2010 AIB’s core Tier 1 ratio was 6.9% and the total capital ratio was 9.0%.
AIB targets a net interest margin of 1.80% by 2013 and a cost/income ratio of around 50% by 2013 versus 62.7% currently.
Kelly said the property market in Ireland “is still very difficult. You’re not going to see any real or meaningful recovery until 2011/2012.” However, he sees growth returning to the Irish economy next year.
Source: Irishtimes.com
MINISTER FOR Transport Noel Dempsey has insisted a train service will run between Dublin and Navan by 2016, despite the project not being mentioned in the revised capital spending programme.
Noel Dempsey insists a train service will run between Dublin and Navan by 2016
Asked if major projects outside Dublin had been put on hold following the Government’s announcement on Monday of a €39 billion investment plan, Mr Dempsey insisted construction on the railway link would go ahead once planning permission was granted.
“Western Rail Corridor phase two is not put on the long finger. Navan rail line [is] not put on the long finger despite reports to the contrary . . . They are not on hold.
“The next stage for the Navan rail line is that they submit their planning permission, their railway order. I’m assured by CIÉ that that will be lodged in the first half of next year. I’m not sure how long it will take to get through the planning stage bit once it gets through the planning process construction will start immediately,” he said.
Mr Dempsey was speaking in Limerick at the opening of the new €660 million tunnel under the river Shannon, which is designed to take up to 40,000 vehicles a day from Limerick city centre while improving access to Shannon airport, Galway, Cork, Kerry and Dublin.
Taoiseach Brian Cowen was asked if the Limerick tunnel would be the last big spending project to be carried out in the west of Ireland for some time. He said this was not a “proper analysis of the full spend”.
Mr Cowen said: “We have to find the balance between the need to make strategic investments which bring a return for the country but also seek to deal with the regional issues. But it’s not a question of dividing about money in a mathematical way, it’s about seeing what are the priorities.”
Mr Cowen said the Government was still investing almost €6 billion in continuing road improvements, not only on major works like the Atlantic Road Corridor but also on the regional and county road system.
“In addition to that we will see significant investment in our public transport system beginning with the major investments in Dublin, our capital city,” he said.
“While we have very serious budgetary issues to address, and not that I would minimise them in any way, we have to continue to invest in our people, invest in our infrastructure, provide the ways and means by which we can have an economy that operates more efficiently.”
Fine Gael’s deputy transport spokesman Shane McEntee insisted no funding had been allocated to the Dublin to Navan railway link and the project had been dropped. “I would love to sit down with the Minister and get a full explanation of the funding proposals. But I just can’t see he’s going to pay for it. There’s no money set aside in the Government coffers,” Mr McEntee said.
“Is he planning to pay for it with Monopoly money?” Mr McEntee said “scores of projects” had been dropped in the Infrastructure Investment Priorities plan.
Meanwhile, Fine Gael’s communications spokesman Leo Varadkar described the claim that 270,000 jobs could be created by the capital investment plan as “complete codology”.
The Labour Party’s spokesman on housing Ciarán Lynch accused Ministers of being “hell-bent on outsourcing the provision of social housing to their developer pals”.
He said “current and future housing provision is to be met almost entirely by leasing existing housing stock from builders and developers”.
Source: Independent.ie
METRO North and the DART underground will go ahead as planned — but there is no money to build Luas extensions, expand the inter-city rail fleet or buy any new buses.
The Dart Underground, on track for 2016.
The public transport programme, on which €5.7bn will be spent up to 2016, will focus more on railway safety and planning than actually delivering the Transport 21 programme.
Gone is the rail-link to Navan and the extensions to the Luas network. The Western Rail Corridor from Tuam to Claremorris has also been put on hold.
While the new DIT campus will go ahead, there’s no money to build the Luas Broombridge extension to serve it.
The Government has also ruled out expanding existing Luas lines because passenger numbers are falling.
But Metro North, which is to cost €3.7bn, and the DART underground (€2bn) are priorities. However, both projects depend on government approval.
There will also be continued investment in cycling routes.
Source: RTE.ie
Shares in AIB are up 5% in opening trade this morning in Dublin, while Bank of Ireland shares have gained over 3% as investors give their first response to Friday’s results of stress tests on the European banking sector.
AIB shares open higher in Dublin trading
Overall, the Dublin market is up over 0.5%, while other European markets are also higher. The London FTSE has gained 0.3% while the Frankfurt and Paris markets opened over 0.5% stronger.
Some of the major UK banks are higher with Lloyds Banking group and Barclays up about 2.5%.
Both big Irish banks passed the tests designed to test their ability to withstand future economic shocks. The health of their capital reserves was shown by the tests to be below average.
But the Central Bank opted to apply tougher standards to the Irish banks regarding potential property losses and that appears to have cheered the markets.
Seven German, Greek and Spanish banks failed the tests but market sceptics said that more should have failed and that investors would not be convinced by Friday’s results.
Source: Breakingnews.ie
New regulations are on the way for people looking to get their drivers licence in Ireland.
Changes to the current system are being finalised in an effort to further bring down the number of people losing their lives on the country’s roads.
L Plate
Ireland is in the minority of European countries which do not have a formal programme on how people are taught to drive.
That could be about to change, with the introduction of the Graduated Driver Licensing system.
It will see learner drivers forced to undertake specific training before they can even apply for their test.
A logbook detailing the hours spent they have spent practising their techniques will also be required.
However, according to the Road Safety Authority, certain measures in similar systems abroad will not be included here, like a curfew on learner drivers, and a ban on carrying passengers.
Source: RTE.ie
The international credit rating agency Moody’s has downgraded Ireland’s debt for a second time since the financial crisis began.
Moody’s is one of the three main agencies which assess the risk of lending to Ireland. It is the last of the three to lower Ireland’s rating for a second time.
Moody's outlook now stable
But Moody’s has moderated its outlook for Ireland from negative to stable, meaning a further downgrade is unlikely. Ireland’s rating is now Aa2 from Aa1.
Oliver Whelan of the NTMA said he did not expect the move to have any significant effect on the cost of Ireland’s borrowing. The NTMA is due to hold its latest auction of 10-year Government bonds tomorrow.
A spokesman for the NTMA said the decision was not unexpected as Moody’s had had a negative outlook on Ireland for the past 13 months. He welcomed the move to a stable outlook. ‘The rating decision is not based on any new information and we do not therefore expect it to have any impact in terms of our debt programme,’ the spokesman added.
Moody’s said it had made its decision due to the increase in government debt, and the higher cost of paying interest on this, as well as weaker growth prospects and the costs of supporting the banks.
The Moody’s report said banking and property would not contribute to growth in the coming years, while a fall in lending to the private sector was also hitting the outlook for economic growth. The agency also said it expected Anglo Irish Bank to need further support.
Rival agency Standard & Poor’s, which downgraded Ireland for a second time in April, maintains a negative outlook for the country.
