Chill wind blows for Irish lenders

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Chill wind blows for Irish lenders
ByJohn Murray Brown

Published: September 17 2008 17:50 | Last updated: September 17 2008 17:50

Ireland’s banks are caught in a bind. The property developers they lent to cannot service their loans, as they are unable to sell enough houses. Those who do want to buy a home are finding the banks’ mortgage departments reluctant to lend in the current credit crunch.

Etc. Etc.

Good Article.
It’s unlikely we’ll see one like it in an Irish newspaper. :unamused:

viewtopic.php?f=4&t=13509

20% of BOI’s loan book is in property. :astonished:
36% of AIB’s loan book is in property. :open_mouth:
95% of Anglo-Irish’s loan book is in property. XX

:open_mouth:

Yeah, I’m still waiting for a more accurate statement like:

Some Estimates, say a year, however, any pragmatic look at the numbers would suggest, that even at transaction rates equalling those seen back in 2005/2006, there is significantly more than one years supply currently being actively advertised for sale, with more arriving every day.

There is also a stock of un-rented, BTL speculation property sitting out there, depreciating and requiring maintenance, insurance, possibly management fee and loan payments (conservative estimates place that at well in excess of 200,000 units. In 2005 Davys, using then historical data, released a report estimating vacant properties at 230,000 units, with no more than 50% of that number holiday homes).

The number of properties changing hands has significantly reduced. The number of properties advertised for sale is still at levels similar to those seen at the height of the bubble in 2006. More properties are being built and more are being added to those looking for a buyer in an ever decreasing pool of buyers. Then there are those properties sitting on the sidelines waiting for an opportunity to sell.

The duration to sell any backlog in the property for sale inventory is a very much movable feast. It depends on the transaction rate you choose and the number of available properties (I suspect, but have no proof, that many using this metric are using transaction rates taken from the heady day of the bubble, while down playing the number of properties available).

As ever, don’t believe the hype.

One can’t but help wonder, reading the article and watching the orchestrated marriges of institutions in the UK and US how long it will be before we see Allied Anglo Irish Bank or Permanent TSB Bank of Ireland.

Blue Horseshoe

I think that those figures underestimate the situation.

If you add total exposure to property for AIB & BOI (mortgages, developers, construction and property etc) you get a higher total. According to a research note from Dresdner that I have the total for…

AIB is 59% (AIB’s exposure to developers and the construction sector alone is 35%)

and

BOI is 69%

Anybody know what percentages EBS have in relation to it’s loan book, and what it is if you add total exposure as above?

The EBS, like Irish Nationwide, is a building society and so restricted in what it can lend against, so my guess is that it’s exposure to property is close to 100%.

Blue Horseshoe

Thanks for that BH. I now know what I have to do tomorrow.

Buy a house? Good man… :wink:

EBS and Nationwide are completely different. One stuck to its founding princples, and one did not.