Tribune - Bank debt: everything and the kitchen sink

tribune.ie/article/2009/feb/ … chen-sink/

tribune.ie/business/article/ … big-banks/

Excellent work, Mr. Ihle. The figure EBS are using tallies with the losses that resulted in Finland and Sweden. These are the percentages that have been used by posters on the 'pin to come to a baseline figure of 50 bn in losses across the banking sector. But this is a baseline based on historical events. Was our bubble bigger? Is the international finance situation worse? (Restricting the availability of recapitalisation money). Is the domestic economy situation worse? (Increasing both commercial losses and residential).

Would anyone think EBS and NIB are making their positions stronger by coming out sooner with their write downs? So that they can show recovery sooner?

or are they doing particularly bad?

a 13% bad debt provision on the two banks would not give 50b. 15% would give that if we include anglo…

13% of the 440 bn of liabilities covered under the guarantee gives 53.2bn… 13%, IMO, will be the average with C&D @ 20%, commercial at 12%, corporate at 9% and residential at 6%. The fact that developers are wrapping their C&D into residential mortgages is going to skew the figures, but the quality of the assets isn’t going to change.

In truth, I don’t think the EBS and NIB are finished with their write-downs (remember, NIB are already on their second round), as I think 20% is the minimum we can expect C&D loans to lose. Ding, ding, seconds away, round three… or round one if you are one of the big three.