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Updated 22.45
AIB HAS POSTED its first profit since being bailed out by the Government in 2009.
A statement released by the bank today said that it had returned to profitability and also posted a significant 60 per cent increase in lending draw downs during the first quarter.
The amount the bank lent out during January-March was €1.1 billion.
Chief executive David Duffy said: “AIB returned to profitability and progress is evident across a number of fronts.”
So what does it all mean?
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So when do we, the taxpayers get our money back?
We don’t, they want the government swap the 3.5 billion they’re owed for shares in the AIB
That’s not exactly the case. The government already owns considerable equity (shares) in AIB. Shares are a very expensive source of finance for the bank and debt is far cheaper. So what AIB are proposing is most likely a buy back of the shares owned by the government with bonds. Bonds yield a lower return to the holder than shares and therefore cost the bank less. This means the government would receive less in terms of repayments but unlike share dividends, bond/debt repayments are mandatory. Therefore if AIB make a b*lls of everything again, the government can legally take ownership.
This explains a lot… https://m.facebook.com/ahjaysuslads/photos/a.234733606718599.1073741828.234693813389245/237380493120577/?type=1&source=46
thats not AIB !!!
Joe there is no mention of issuing bonds in the article (unless you know any different).
What it states is AIB are looking to trade equity (stock or shares) for its existing debt.
This stinks of a second stitch up of the taxpayer courtesy of banker compliant policymakers.
Further diluting the equity in an institution of questionable solvency.
In addition, it would be ethically questionable for the state to begin speculating with AIB shares as well as assuming enhanced liabilities through the acquisition of this equity.
If AIB shares really have any value offer them to the market and repay the debt in cash.
AIB was bust, remains bust and will continue to be bust.
The ” in the black notion” is virtual.
AIB has grossly under provided for residential mortgage impairments and SME debt as has been pointed out but we are all required to buy unto collective delusion that AIB is now profitable.
Yeah, right.
“In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”
― Charles MacKay, Extraordinary Popular Delusions and The Madness of Crowds
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
– Napoleon Bonaparte, 1815
Big Congrats AIB.
Your in the Black,
Everyone else is in the Red.
Until the next time ,
Well done….
Remember the days where AIB’s BILLIOn Euro in annual profit used to make the news headlines? How on earth the “regulator” didn’t smell a rat is beyond me…
You are crediting the Regulator with a modicum of common sense.
Excellent point.
Winding_down, super profits and uncontrolled expansion should have been an alert. But the Regulator was either too stupid or too cowardly to intervene and to perform its duty.
here in the uk they don’t cripple you with transaction fees. Its gone too expensivw to keep my AIB account open in Ireland so I’ll soon be closing it.
I attempted to move banks last week. Before I even mentioned how much I wanted to transfer or how much I earned, I asked about an overdraft. The lady behind the counter laughed…..
arrogant pr1cks to boot!!
Bounce a payment and see how much they charge in the UK. From experience charges in ROI are not half as bad then the UK.
UK banks are so much more customer friendly. Metro bank in London even have Bowles of water and treats for dogs who come in with their families. Best bank ever!!
Simon PTSB free banking,check it out
Back in the black……Black hole more like it. This means nothing to Joe Blogger who will get not a single cent back from the bail out.
All this good news almost makes me forget about our crippling national debt, total loss of sovereignty, oppressive taxation, our corrupt police force, inept and weak politicians, and an apathetic, amnesiac populace to cap it all off.
The Eurovision result must have nearly driven you over the edge
No Saul, this damn zombie apocalypse has driven me over the edge. In Dublin it is getting harder and harder to tell who is zombie and who isn’t
Shoot first, ask questions later
That’s a yes Saul
Braaaaaaaainsssssssssss……………..braaaaaaaaaaaaaiiiiiinnnnnnnnnnnnsssssssss………ugggggghhhhhhh………
Does this mean they will be reversing their bank charges introduced last year where we pay through the nose for managing our own money and do all the work for them as most branches are now self service?
Thanks for reminding me to close my account with them today.
Absolutely P1 – Free banking will sort out the books.
yea it’s quite bad alright, charging you to RECEIVE money every time into their bank accounts! lol Charging you everytime you click a drop down button on their online system to pay a bill, top up phone, even transfer funds from one AIB account to the other AIB account on the same system!!!! They say if you keep your balance above €2,500 you’ll avoid all of these fees. Well let’s see… I’ve plonked that balance onto to one account and I’m working off it, lets see what charges they will find on next quarterly bill. They will also find ANY opportunity to Post a letter to you, so they can charge you for that letter AFTER you’ve already opted for ‘e-statements’. I got a bank transfer from the sale of an item i sold on a marketplace online, it came from Germany, € to € – AIB posted me a letter to tell me I received a payment from such a person from Germany! I KNOW! I can see this on my online bank account and have opted for e-statements going on 3 years now so PLEASE STOP F******* TRYING TO FIND AN OPPORTUNITY TO POST A LETTER SO YOU CAN CHARGE ME 20 TO 30 CENTS!
yea move to another bank if you can, but the options are slimming now, again, like renting landlords, employers pay cuts, esb to bord gas bills – THEY ALL FOLLOW EACH OTHER, if one does it, they will find their OWN excuse to increase it.
If there is any bank offering free transactions with no hidden crap, please tell us all! you will find many customers.
Paudi,
PTSB don’t charge once €1,500 hits the account every month.
Just has to go in, doesn’t have to stay there, you don’t have to keep a minimum balance of €1,500, all you have to do is lodge it every month.
Hope that helps.
really? many thanks for that, i thought one need to keep a balance of a certain amount, i think Ulster is €3,000. I’ll look in to this so, just takes a bit of changing for a month or so to get things running smooth.
Their switcher account team sets up and transfers all your direct debits too – great system glad i left bank of ireland
Great to see it. It’s doable once you get the time to do it. Now hopefully they adopt the same attitude with their customers who are in arrears.
Riddle me this… On April 25th this year the government (us) recieved more shares in AIB because the bank could pay the government (taxpayers) €280 million in interest it owed to the government.
Today two weeks later they are now “profitable?”
Me bollocks.
Well spotted Dingle.
There’s a strong stench of books being cooked here.
Can the state point to hapless regulators this time or admit culpability.
” Buried within the 2012 results from AIB, Bank of Ireland and PTSB are two sets of figures. These reveal, in each case, the book value of the assets as set out in the balance sheet of each bank (net of provisions) together with the banks’ own estimates of the ‘fair value’ of these same assets. The latter value is the best estimate of the commercial value of these loans if they were sold today to a third party.
The difference between the two values is €9bn for AIB, €12bn for Bank of Ireland and €7.5bn for PTSB. That’s a hole of almost €30bn – equivalent to about 15 per cent of the book.
Worse still, seven years into the recession the big banks are still losing vast amounts, before provisions for bad debts. That hole in the balance sheets is getting worse, not better”
Whos there accountant?!?!?!..Walter Mitty?!?!
The late Russell Murphy. Dead men tell no tales.
Mortgage arrears continues to grow … long way to go it seems
Some good news finally!
Sorry my bad. Obviously this is bad news because so much of our money is tied up in this bank and because our economy needs liquidity, we obviously want to see AIB fail…..
I can’t believe I just said “my bad”. Shoot me now!!
Didnt think the Journal would be too keen on good news.
Fancy a few pints in the Cabra House to celebrate Saul?
Cabra…..is that the expensive Dublin suburb that we are all afraid to go near 20 years ago?
Saul this is only good news if you’re a shareholder/employee of the bank. It might lead to some slight reductions in charges at some stage in the future but I wouldn’t bank on it (sorry). When a bank makes a profit it is a sign that they are milking more money from their customers (that’s us).
“Good news” for whom?….white collar fat cats I guess.
No it’s also good news for the economy and the taxpayer.
Or it could be that they’re writing back against debt provisions made in previous years. I agree with Saul, it’s good news. If you turned it around and they were still making losses, I would have thought that would be bad news.
It increases the chances (albeit very slightly) that they will eventually pay back the Governement (us) the money that they were bailed out with.
Saul, I’m afraid you’ve come to the wrong place if you’re trying to get people to be positive about anything.
When was any sort good news on the journal ever taken at face value, seriously,most of them are truly addicted to bad news.
Can I have a big performance bonus?
No, you can’t. The bank is in the red.
Suppose I tell you, no questions asked, that I can say that the Bank is in the black.
Good man yourself. You can have your big bonus.
This puts me in the mood for ac/dc
Ask yourself one question. Has AIB fully provisioned realistically and prudent for the full extent of residential mortgage impairments and SME bad debts? I don’t believe that it has made adequate provision but I know that means that I’m a nasty and cynical sceptic. Trust the Central Bank of Ireland;,it would never let you down.
So the tax payer buys the shares for the government, and when the government sells them we don’t get a cent back, sounds like something only us Irish would tolerate.
You’ll be splashing out on a big steak tonight if you bought any of their shares a few years back when they were going for like a euro a share :)
€1 a share a year ago… They are only worth something like 0.11c now ( I think… ) can’t see any profit there
A year and a half ago, you could buy a share in AIB for 4 cent.. They reached a high of 16 cent in December.. There was profit to be made there surely.. And even now, with this announcement I would suggest putting any money you have into shares in AIB.. They’ll be a nice money maker come this time next year.. You literally couldn’t lose money on them at this stage.. They will never hit below 9 Cent again you will only ever make profit on them..
I dunno Sean ( not doubting any Knowledge you may have in this area…) it sounds way to easy and way to good to be true…. Not that I have any money to be risking on the highs and lows of the stock market.
Michael, in many ways Sean is right.
The funny thing is that crash brings opportunity, I have invested €25k and I am up €7k to date (admittedly 41% of this is tax, but still a great chunk of change from where it was).
The problem is that people only want to invest when things are going good, which means it’s more expensive.
The risk you’d be taking here is another skeleton falling out of the closet and the share price tumbling again.
Guys the assumption that the shares will continue to rise is not necassarily true. There are 521 billion AIB shares in circulation of which 99.8% are owned by the government through the National Pension Reserve Fund and only 0.2% are in general circulation for trading. At 12c per share this would imply the AIB is valued at €62bn and is effectively the most valuable bank in Europe which is clearly not the case. Under any new capital structure or IPO this value per share could be completely diluted
I ran a firm in the UK . When I opened my AIB buiness account the manger was pissed drunk ! That was about 25 years ago.
The bank loved me while making money , when I need assistance for a few months with a cash flow problem, this was after about 15 years positive cash flow they made me put my house up as colateral for about 3 months.
They laughed in my face so happy to see them struggling, nothing but arrogant self centred people working for them.
They only interested in big business.
I was actually told that my business was not big enough for them: 3 million plus turnover !!!
Moved to Santander so much better
Hope they sink
Will they start opening more branches now and instead of having to go to those terrible mobile banks …
Probably not due to a recently published report that indicated that it’s 2014 & people use the internet these days. What do we need more branches for?!
they’re making far more money now than in the old days, less people employed, more automation and they’re charging you for the maintenance of it, charging you MASSIVELY!
That was quick. I’m still waiting on a phone call concerning a loan application since September 2002. Their pension advisors are pure spin merchants. Avoid at all costs.
I thought the Government already owned 98% of the shares in AIB!
In any event, this proposed stunt has all the hallmarks of a fresh equity issue, but one with an Irish twist. There is no need to go to the market and get rejected on this POS share, Why? The cash is in the bank already, or at least on the books of the bank as a loan from Government (aka us suckers- the taxpayers.) Just a name change and reclassification from debt to equity is all that is required, and, of course, the sign-off by some dozy fec*er in the Department of Finance, and Bob’s your uncle!
AIB saves annual interest charge and we, the taxpayers, have more skin in the game, meaning our great-grandchildren might get some benefit from a future sale of AIB, long after all of us suckers are pushing up daisies.
And the amount of this proposed transaction – €3.8 bn. Sure the whole AIB tub-of-washing is hardly worth that even now.
I can smell the wool from here, about to be pulled over our eyes!
In my view, if this transaction goes ahead many could be singing “Dirty deeds done dirt cheap” and not ” Back in Black”,
Although it could be that the “back in the black” position mentioned in The Journal is so good, that the Government would be fools not to plump. But I doubt it!
The old stock market adage of “sell in May and go away and don’t come back till St. Ledger day” is to be heeded on this one, I think., especially if you’re sitting on any profit.
And Mr. John Moran, “won’t you stay, just a little bit longer……”
“Couldn’t”
It seems that some are able to spot and to say that the Emperor has no clothes.
AIB feels compelled to bluff that it is solvent and profitable in the hope that there are enough people gullible to believe this fiction.
Hey hey might get my student loan so yyyiiippppiiireee.
have your say