Anyone got any figures on what profits the banks have made over the last 4-5 years? And how much of this they have issued in dividends? Interest on preferreds/subordinates?
Does the figure come anywhere close to 9 bn?
Have the banks counted the rolled-up interest as income?
Have the banks been paying dividends using money they haven’t received?
Have the banks been paying dividends using repo funding or deposits?
This would absolutely be a pyramid scheme if this is the case.
Yes to all. And that 9bn has now been lumped into NAMA. Nice.
No need to restate earnings, it’s now been crystalised and is off the books.
AIB was making about 2 billion a year before the arse fell out of it. The EPS was 2 something, they were paying about 80c per share in annual dividends on a yield of about 4%.
Where exactly does the figure of €9bn rolled up interest come from ???
Around 2002/2003 the banks were making pretax profits in the range of 2b/3b and by 2007/2008 this was in the range of 4b/5b. So probably around 15b pre tax. So around 10b post tax. I think most of that went to the shareholders.
The real pyramid scheme was the huge increase in cross bank deposits during 2006/2009. Bank A deposits 15b with bank B. Asset Bank A, Liability Bank B. Bank B deposits 15b with Bank C. Asset Bank B, Liability Bank C. Bank C deposits 15B with Bank A. Asset Bank C, Liability Bank A.
It may all net out zero GAAP but that 15b allows all three banks to hide a multitude of sins.
Have these been broken out of annual reports ???
**I finally found the €9bn figure . The €77bn ( pre haircut) includes €9bn of Interest Due Rollups from the supplementary document . **
finance.gov.ie/documents/spe … naldoc.pdf
and
**
Therefore the haircut is REALLY from €68bn to €55bn or 19%**
There we are now 
what else are they hiding.
Only if you consider the rolled up interest to be thrown in for free - or that it has zero value (which may be closer to the truth).
This point has just been made by Moore McDowell on Newstalk. The guy from Dolmen agrees. Eamon Keane is aghast. Garrett Fitzgerald is blustering.
I never thought I would see eye to eye with More McDowell, but it is worse than that !
But if the rolled up interest to date is €9bn on €68bn of loans and if the REAL HAIRCUT is €13bn then look at *the magic of compound interest * at work
Assuming the boom stalled 3 years ago it is safe to assume that
2006-2007 €2bn rolls
2007-2008 €3bn rolls
2008-2009 €4bn rolls
Total €9bn
Following which
2009-2010 €5bn rolls
2010-2011 €6bn rolls
Total €11bn against a real haircut of €13Bn
By September 2011 almost the entire haircut will have rolled back over again and by January 2012 there will have been NO HAIRCUT
Anyone who expects any ‘performance’ in the interim is deluded or a fraudster against the taxpayer . These loans will continue not to perform as they always did . Many €30m loans are ‘secured’ against a €2m site somewhere 
Considering property prices are still in freefall NAMA will be in negative equity from day one.
Negative Equity ???
€68bn of loans were given out . The LTV is assumed to be 75% on these so the properties were valued at ((€68 / 3) x 4 ) which is the magic number €90.66 Bn . A 50% assumed drop in values says these are now worth €45.33bn, Lenihan said €47bn
But he then assumed a 10% uplift to get €47bn to €55bn and make a ‘profit’
But whether it is €47B or €45.3bn the Rollover will be €5bn next year , over 10% of the assumed value today and that is BEFORE there are any othe rfalls which will merely increase the % that the hard figre of €5bn represents .
If they fall in value to €30bn by end next year ( 67% drop from peak values) and if rollovers are €6bbn in 2010-2011 then the rollover will be 20% of the then value 
Tell me where I am going wrong here someone
Dont forget that 19% is the haircut across all NAMA Banks. BOI and AIB have stated that they expect to suffer less that the average haircut. So possibly a mere 15% haircut 
for BOI and AIB, no wonder their shares are rocketing this morning!
That is supposing that there will be interest charged.
Joan Burton identified that the legislation is very sketchy on this point - whether by accident or design. It was the only point, I thought, where Lennie lost his cool. He was visably furious.
Lennie finally agrees
Good woman Joan!
Full transcript here for anyone who missed it.
kildarestreet.com/debates/?i … 3.0#g434.0
2pack your good with numbers,so if AIB say they only need to raise 2 billion in the next 12 mths to raise their Capital reserves up to acceptable levels i.e.tier 1.surely this implies that their haircut can be extrapolated from this information.I think AIB might have finally shown their hand with this 2 billion figure.So go get the Bastards,I’ll be cheering you onn from the wings. 
That €2 Billion is Tier One for a bank that will be a lot smaller in 12 months . 20-30% smaller after the €24bn of Nama product is excised .
Furthermore some of those NAMA loans were already impaired / written off / provisioned against / group criticised already and their then current tier one has likely already been degraded in that case… well maybe not if only group criticised but in the other cases yes .
AIB will likely lose €2bn on its residential mortgages alone over the next few years and it does not have the worst loan book in that market by any means .
As the state owns 25% of AIB ( pre and post nama) I can unfortunately see a call on the shareholders to be as likely as a Bond issue somehow
They had a 25% share uplift today . The upshot of that is that they feel confident to kite this sort of proposal now and not frighten the market and I bet they don’t drop 25% tomorrow after announcing their €2bn tier one hole .
The haircut for AIB and BOI (below 30%) appears to have been made on the basis of what these banks could afford rather than the real value of their toxic loans. Why is the Anglo write down so much higher than AIB & BOI? Was Anglo really that bad? The whole sham valuation process is a complete and utter charade.
Fraid so Osvaldo. Anglo was worse than the other 2 and Nationwide probably the very lowest of the low .