EU to release details of bank stress tests

The EU is to release the details of stress tests on more than 100 European financial institutions (including some of Ireland’s banks) on July 23, it has been announced.

The test was designed to ensure that banks bear loan losses resulting from ant further downturn in the EU economy. However the test has been criticised by several analysts for setting the bar too low


Irish Bank shares fall amid nationalisation fears

Shares in AIB and Bank of Ireland have fallen by 19% and 14% respectively already this morning ahead of fears that the Irish Government will be forced to recapitalise both banks following the announcement of new capital rules and the announcement of the discount at which the state owned bad bank (NAMA) will buy distressed development loans from the banks.

Reports across several media outlets have speculated that the extent of discounts and of recapitalisation could far exceed initial estimates, but Misnister for Finance, Brian Lenihan, has refused to confirm any speculation ahead of official announcements in the first half of this week.

The extent of the recapitalisation is likely to significantly dilute existing shareholders’ stakes in the banks and a sell-off this morning has resulted.

Can Tom Parlon predict the future?

The Construction Industry Federation (CIF) Director General and former PD Junior Minister, Tom Parlon, has stated that house prices in Ireland will not fall beyond current levels. While this statement has got headline status on today’s radio news bulletins it should also be remembered that Mr Parlon was part of a government that predicted a “soft landing” for Ireland’s property bubble. It would be great for the economy if he as right this time but I suspect that economics will play a larger role than parlonomics

According to a CIF & Irish House Builders Assoc (IHBA) report, house prices across the country have fallen by an average of more than 40% from their 2006/7 peak.

A new report from the Construction Industry Federation and the Irish Home Builders Association also claims the level of unsold housing stock is being exaggerated. The report says the number of unsold dwellings in the Dublin area represents less than eight months supply in normal market conditions – and an average of one year’s supply elsewhere.
For more on this story see:

AIB shares fall below €1

On November 20th 2008 I wrote a post for this site about AIB shares dipping below €2.

At that point noone could even imagine what has happened since. As I write AIB shares are trading at 80 cent.

In a bloodbath morning on the ISEQ, Irish bank shares have fallen by almost 50% as fear grips investors following the nationalisation announcement of peer bank Anglo Irish late last thursday night.

If this fear is irrational then this is a definite BUY opportunity on AIB, BOI and ILP but if not then who knows what awaits us.

AIB shares dip below €2

The share price of Allied Irish Bank (AIB), Ireland‘s largest Bank dipped below €2 in early trading this morning with a slight rally later but a sharp drop again after lunch.
As I write, it has dropped again to just above the €2 mark:
AIB Price Nov 20 08
AIB Price Nov 20 08

This follows hot on the heels of Bank of Ireland  (BOI) falling below the landmark €1 mark on Monday of this week after their announcement that they were completely cancelling their dividend payment policy. This was followed by Anglo Irish bank falling below €1 yesterday.

AIB shares have fallen over 90% in value since the peak in early 2007. If they are to fall below the €1 it would mark almost complete wipeout for the Irish banking sector in just a few months.

An Post partner bank facing collapse

Fortis, the Belgian-Dutch bank that runs a joint venture with the Irish post office under the brand ‘PostBank’, is tonight facing collapse as Dutch and Belgian officials scramble to rescue it.

A spokesperson for An Post (the post office service in Ireland) stressed that the operation of postbank is unaffected and that all an Post deposits are state guaranteed.

European Central Bank president Jean-Claude Trichet met Continue reading