The Irish banks generally had a good day yesterday, with BOI in particular
rte.ie/business/2007/morning … odbody.pdf
geckko
November 1, 2007, 9:51am
2
A snippet from the coal face.
I am seeing (large) UK property portfolios being written down on NAV basis over the last quarter.
Anglo down 70 cents today to 10.9 - down 6%
Is shorting stocks covered by the anti-glee policy?
Apparently Anglo’s UK subsidiary issued a 2 billion pound commercial mortgage backed bond yesterday, this was purchased by the Dublin branch and repoed with the ECB. Nothing dodgy, but they obviously need the cash, and that’s a cheap way to get it.
I wonder how the deposit base is holding up. I’m guessing it’s made up of a higher proportion of corporate deposits than AIB and BOI, which tend to be more volatile than retail deposits.
[*Foreign sales hit Anglo * (Foreign sales hit Anglo - Independent.ie )
ALL of the Irish banks have had a terrible time of it since the full extent of the US sub-prime mortgages disaster first began to hit in August.
However, Anglo Irish has suffered more than most with its share price down by 18 per cent since the end of July and by a massive 36 per cent from its late May peak of €17.50.
Last week was a truly dreadful one for Anglo, with the shares falling by almost 6 per cent at one stage on Thursday before rallying in later trading. The sudden steep fall in the Anglo share price led to a spate of colourful rumours as investors sought an explanation for what had happened.
There were reports of margin calls and other equally lurid tales. The truth it seems was more prosaic. On Tuesday investment bank UBS issued a negative report on Anglo.
This triggered a further wave of selling by short sellers. While accurate figures are not available for the Irish market Anglo is generally reckoned to have attracted more interest from short sellers, who bet on the share price falling, than the other Irish banks.
The revelation that banks were prepared to advance funds to solicitors without proper documentation provided further evidence that Irish bank lending standards are not what they once were. With overseas investors already nervous about the Irish property market this led to further selling of Irish bank shares.
As the Irish bank which has grown most rapidly in recent years, Anglo was hit hardest by this sell-off. On Thursday morning there were very few buyers for the shares being off-loaded by the foreigners and the Anglo share price took a further tumble. At one stage it fell as low as €10.92 before finishing the week at €11.13.
Until all of the bad news about the Irish property market is out in the open, all of the Irish banks, and Anglo in particular, are going to be vulnerable to sudden large sell-offs as nervous overseas investors bail out.
Investors will be waiting anxiously for Anglo’s results for the year to the end of September, which will be published on November 28.
“Until all of the bad news about the Irish property market is out in the open” - I think the likelihood of this happening is low, given Eugene Sheehy’s comments.
Pill
November 4, 2007, 9:08am
7
verbatim:
Apparently Anglo’s UK subsidiary issued a 2 billion pound commercial mortgage backed bond yesterday, this was purchased by the Dublin branch and repoed with the ECB. Nothing dodgy, but they obviously need the cash, and that’s a cheap way to get it.
I wonder how the deposit base is holding up. I’m guessing it’s made up of a higher proportion of corporate deposits than AIB and BOI, which tend to be more volatile than retail deposits.
I think you’d be right there. A few weeks ago I attended a meeting held by AI for depositors - I would say 66/33 corporate/individuals.
Thanks for the info. I guess we won’t know how the ratios are looking till they file their next accounts. 2006 accounts show that they had better deposit/loan ratios than both AIB and BOI. I wonder if that will last.
