The AIB thread


#1

The other quoted Irish banks - Bank of Ireland, Anglo and PTSB all have a thread on The 'Pin, so why not AIB I hear you all ask.

Well I don’t know, but this gross injustice against the largest bank in the country must end.

The 2008 half yearly results on 30th July will be interesting.

So will we see a sea of red ink? Massive increases in bad debt provisions? Earnings downgrades? Dividends slashed? Rights issue? Share buyback? Takeover target? Business as usual?

Stay tuned.


#2

It is impossible to take reporting of banks at face value.

My advice, ignore earnings and concentrate on cash flow. You can book earning on accruing interest from developers, say, but you can’t magic up the cash.


#3

US Banks Like Indymac/WaMu/Wachovia apparently have been giving negative-amortization mortgages to people and rolling up a bucketload of interest which they will probably never actually earn if the mortgages go into foreclosure - so they will be forced to restate their earnings.

I hope the analysts put the heat on AIB to quantify the extent of this ‘revenue’ in the earnings conference call.

These developer loans with interest rolling up are Ireland’s neg-am loans.


#4

A decent analyst should be able to dig into data and look for discrepencies.

For example decent growth in assets on the balance sheet, but weaker growth in new business.


#5

So can anyone comment on the cash flows of Irish banks from their impenetrable accounts?


#6

#7

The only good thing for AIB is that it could raise possibly a €1 billion by selling its stake in M&T and would have to go cap in hand for a devastating rights issue (which they would not get away methinks)


#8

Do AIB really need to raise money now though? My understanding is that they don’t really have a problem getting money for loans as they never really got into “package and sell” mode of operation that the others got into?


#9

#10

So all the analysts have their knickers in a twist that the dividend announced tomorrow morning will be* flat *!

Well that would be a disaster with today’s low of 6.85 representing a meagre 11.5% yield on last years FY dividend of 0.79.

I’m going out on a limb and predicting that the 2008 H1 dividend increases from last year’s H1 27.8c :stuck_out_tongue:


#11

I think they are more concerned about the fact that AIB almost always rises its dividend. I think the only time in the last 30 years when they didn’t raise it was during the ICI crisis.


#12

Analysts schmanalysts.


#13

Profit Warning

They were previously forcasting low single digit earnings growth for FY08 and that forecast is now reduced to 185-190c.

So that’s about -10% EPS growth yoy. Forward P/E below 4 and prospective dividend yield over 10% based on yesterday’s closing price. Earnings call is at 9.30. I’m sure there will be a few questions about the health of the loan book.


#14

Don’t think these are that bad at all. Always expected Allieds to be the outperformer. Reckon this will close up a decent amount today.


#15

#16

Whats the share pricing doing?


#17

It opened up 2.7%


#18

Interim dividend up 10%, now that’s a statement.

Share now down 1.5%, but doing better than rest of ISEQ.


#19

Eugene sees house building next year in the mid 20s :open_mouth:


#20

Some more comments for the AIB analyst call