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Thread: The cracks are reappearing in Ireland's banking system

  1. #16
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    Default Re: The cracks are reappearing in Ireland's banking system

    The Central Bank bi-annual macro review published today isn't exactly reassuring when it comes to banks.
    (Reuters) - Questions remain about whether Irish banks have the provisions they need to cope with bad loans, particularly to small and medium-size enterprises, the country's central bank said on Friday.
    "Uncertainties remain about whether banks are sufficiently provisioned to cope with the outstanding stock of distressed loans," the central bank said in its biannual macro-financial review.
    Ireland's banks are coming to grips with a mortgage crisis that has left almost one in five homeowners behind in payments. But business loans also needed urgent attention, the central bank said on Friday.It said the level of impaired SME and corporate loans had risen to 27 percent in the third quarter from 24 percent in the quarter before, and that the problem could undercut a tentative signs recovery.
    "While the problem of mortgage arrears is the subject of much attention, the rate of distress in the SME and CRE (commercial real estate) sectors is significantly higher," the central bank said
    http://uk.reuters.com/article/2013/1...9B50D920131206

    The CB review is here:
    http://www.centralbank.ie/Pages/home.aspx

  2. #17
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    Default Re: The cracks are reappearing in Ireland's banking system

    Some TDs are complaining about the parsimonious amount of information released from the stress tests, and are asking for more.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  3. #18
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    Default Re: The cracks are reappearing in Ireland's banking system

    If SMEs go down, so will more mortgages, and more jobs, and so on.

    From 2008, everything has been done to try to sustain zombie banks, and virtually nothing to generate employment.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  4. #19
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    Default Re: The cracks are reappearing in Ireland's banking system

    That CB review paints a pretty bleak picture overall. Unsurprising that they picked a busy news day to sneak it out.
    Horrendous non performing loans figure:
    Asset quality has weakened further in recent quarters. The valueof non-performing loans (NPLs) continues to grow, as a result ofsignificant borrower distress in the household and NFC sectors(see Sections 2.2 and 2.3). The stock of impaired loans32 roseby €1.5 billion since the end of 2012, to reach €57 billion at theend of 2013 Q3 (Chart 30), equivalent to 27 per cent of the valueof outstanding loans
    Last edited by PaddyJoe; 06-12-2013 at 05:29 PM.

  5. #20
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    Default Re: The cracks are reappearing in Ireland's banking system

    Quote Originally Posted by PaddyJoe View Post
    That CB review paints a pretty bleak picture overall. Unsurprising that they picked a busy news day to sneak it out.
    Horrendous non performing loans figure:

    "increasing distress in the household sector" is not good. How does this tally with growing employment and increasing income tax take ?
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  6. #21
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    Default Re: The cracks are reappearing in Ireland's banking system

    Quote Originally Posted by C. Flower View Post
    "increasing distress in the household sector" is not good. How does this tally with growing employment and increasing income tax take ?
    A goodly number of the new jobs may be going to people the companies are bringing in from abroad. Deutsche bank, for example. They're solvent and hopefully paying income taxes, VAT etc, but the people who have been here since the boom still have debts to service and more and more taxes on top. Anyone who has been unemployed for a while and now has a new job will probably be spending most of their new income filling in black debt holes from the period of unemployment. Meanwhile, those who haven't bought a house yet and who are watching prices rising are probably throwing most spare money into a savings account and praying.
    "The floggings will continue until morale improves "

  7. #22
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    Default Re: The cracks are reappearing in Ireland's banking system

    Full Macro Financial Review Here - http://www.centralbank.ie/publicatio...w%202013.2.pdf

    As Ireland exits the official assistance programme, the macrofinancial
    environment remains challenging amid some tentative
    signs of economic recovery.1
    Gross domestic product (GDP) growth is projected to grow
    marginally in 2013 and to increase to about 2 per cent in 2014,
    as a pick-up in domestic demand begins to complement
    continued export growth (Chart A1). Although its high level
    remains a concern, there has been a decline in the
    unemployment rate of late. Recent data indicate sustained
    employment growth (Chart A2) and higher labour force
    participation, developments which suggest some momentum to
    economic activity. Further fiscal tightening and high levels of
    private sector debt, however, can be expected to weigh on
    domestic demand by constraining consumption and investment
    activities. Highly-indebted households remain vulnerable to a
    rise in interest rates or a fall in disposable income.
    Irish sovereign bond yields are well below their peak levels and
    spreads over core euro area Member States remain lower than
    at any time since mid-2011 (Chart A3). Projected fiscal deficits
    remain in line with the targets in the official assistance
    programme. Lower than expected growth rates, however, could
    endanger the attainment of medium-term fiscal targets.
    Furthermore, a re-assessment of sovereign risk by financial
    markets could undermine investor confidence and impact on
    long-term debt sustainability
    Thomas Jefferson : Banking Establishments are More Dangerous to our Liberties than Standing Armies.

  8. #23
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    Default Re: The cracks are reappearing in Ireland's banking system

    I don't believe a word out of the Central Bank on the subject of Irish banks. In fact I don't believe much out of the Central Bank at all never mind Irish banks themselves.

    Neither should be within an asses roar of publishing 'stress tests' on Irish banks.
    Think National. Act Local. Oh- and superstition is just the dark matter of human history.

  9. #24
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    Default Re: The cracks are reappearing in Ireland's banking system

    Moodys downgrades Bank of Ireland. That wasn't in the script.
    Credit ratings agency Moody's has downgraded Bank of Ireland's senior bonds and its deposit rating over concerns that the bank may need to raise additional capital to cover potential bad debts.In a statement, Moody's said the downgrade reflects its view that the provisions made by Bank of Ireland to account for losses on non-performing loans may prove inadequate.
    Non-performing loans are those mortgages, personal and business loans where borrowers are not meeting repayment terms and which are unlikely to be paid back in full.
    The provisions made so far, it said, "remain low by comparison with BOI's peers in Ireland and some other countries facing similar challenges such as Spain".
    The statement also refers to the recent Balance Sheet Assessment by the Central Bank which also concluded that Bank of Ireland would need to make additional provisions.
    http://www.rte.ie/news/business/2013...d-debt-rating/

  10. #25
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    Default Re: The cracks are reappearing in Ireland's banking system

    Quote Originally Posted by PaddyJoe View Post
    Moodys downgrades Bank of Ireland. That wasn't in the script.

    http://www.rte.ie/news/business/2013...d-debt-rating/
    Does that mean that the others are OK ? Have to say I would be surprised about AIB.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  11. #26
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    Default Re: The cracks are reappearing in Ireland's banking system

    Quote Originally Posted by C. Flower View Post
    Does that mean that the others are OK ? Have to say I would be surprised about AIB.
    BOI was the only bank that released any info on the Central Bank's review a couple of weeks back. The CB said it needed to make provisions for an extra 1.3 billion in losses. AIB and Permanent haven't released any details on the CB review but it's generally thought that they are in worse shape that BOI.

  12. #27
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    Default Re: The cracks are reappearing in Ireland's banking system

    Not exactly a vote of confidence in AIB.
    AIB’s chief operating officer Anne Boden is leaving the bank after just 18 month in the role, The Irish Times has learned.In a statement last night, AIB confirmed Ms Boden’s departure, saying she had “decided to leave the bank to pursue new challenges overseas”.
    The bank, which is 99.8 per cent owned by the State, declined to make any further comment. Staff were notified of her departure yesterday.

    Employees surprised
    Ms Boden was one of the most senior members of chief executive David Duffy’s management team and her sudden exit has surprised employees.

    Her position was newly created and she was in charge of the transformation agenda at the bank, aimed at reducing its operating costs by €350 million over the next two years in a bid to return to profitability.
    In November, Ms Boden was one of four senior executives at the State-controlled bank charged by Mr Duffy and the board of the company with accelerating a resolution of its customer “arrears challenge” so that it can attract external investment and deliver a return to taxpayers.
    She was regarded as the architect of a major plan to digitise AIB’s activities, introducing cloud-based technologies to its operation. Ms Boden was also responsible for a number of recent outsourcing contracts at the bank.

    http://www.irishtimes.com/business/s...post-1.1633704

  13. #28
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    Default Re: The cracks are reappearing in Ireland's banking system

    There's lots of reassuring language appearing over the last few days in relation to the Irish banks and the latest ECB bank review. The last CB bank review last autumn didn't look particularly good.

    The European Central Bank will press banks to change the models they use to predict losses and take account of its views on asset valuation if the ECB is unhappy with their risk assessment, signalling an aggressive stance in its review of the bloc’s lenders.Frankfurt today published further details today of how it will examine the balance sheets of the euro zone’s 128 largest banks before taking over as the euro zone’s single supervisor in November.
    Between now and August, teams of national supervisors and auditors will check on average 1,250 credit files per bank - significantly more for larger banks - against common guidelines that the ECB published today.
    The total exercise will cover 58 per cent of banks’ assets as weighted by risk. A test to see how banks would hold up under certain shock scenarios will follow over the summer and all results will be released in October.
    Euro zone banks have never been measured against common thresholds, such as a single definition of when loans become impaired and many have never had their books interrogated in such detail. Once the results are known, the ECB will push banks to reflect some of the findings in their 2014 accounts.
    http://www.irishtimes.com/business/e...heck-1.1720339

  14. #29
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    Default Re: The cracks are reappearing in Ireland's banking system

    Mario doesn't seem to think that Irish banks are fixed.
    The President of the European Central Bank has said Ireland's banks face "outstanding issues which still require to be addressed".Mario Draghi highlighted the need to complete "restructuring and reforms", addressing the "still very large stock of non-performing loans" and "ensuring the viability of all nationalised banks".
    Mr Draghi made the comments in a letter to Fianna Fáil's finance spokesman Michael McGrath.
    http://www.rte.ie/news/business/2014...i-irish-banks/

  15. #30
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    Default Re: The cracks are reappearing in Ireland's banking system

    Quote Originally Posted by PaddyJoe View Post
    Mario doesn't seem to think that Irish banks are fixed.

    http://www.rte.ie/news/business/2014...i-irish-banks/
    Morgan Kelly not altogether wrong, so.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

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