QUOTE AND NEWS
Mondo Visione  Apr 16  Comment 
Novantas, a leading financial services analytic advisory and solutions firm, is pleased to announce that Allied Irish Banks, p.l.c. (AIB) has selected Novantas’s PriceTek (R) Deposits Platform to improve analytical efficiency and provide a...
Financial Times  Mar 8  Comment 
Duffy joining Clydesdale after opening way for Irish bank’s IPO
The Hindu Business Line  Mar 6  Comment 
In an interim order, the Bombay High Court has restrained the city police from arresting or taking coercive action against Bollywood actor Deepika Padukone in connection with her participation in...
Financial Times  Mar 5  Comment 
Chances of bank returning to private ownership within 18 months are boosted
The Economic Times  Feb 13  Comment 
he script that AIB presented to the government authorities in the culture department was not the same that they presented.
The Hindu Business Line  Feb 4  Comment 
Mumbai’s overzealous vandals are back, against the AIB show
The Times of India  Jan 26  Comment 
Wipro has won a $150 million (Rs 900 crore) IT outsourcing deal from the Allied Irish Banks (AIB), one of the big four commercial banks in Ireland. India's third largest IT services company will provide infrastructure management services (IMS),...
The Hindu Business Line  Jan 26  Comment 




 

Allied Irish Banks (NYSE: AIB) is the second-largest bank in Ireland by assets. The firm offers various financial services, including lending and capital markets activities. Debt contagion in Ireland has caused the bank to suffer losses in the past two fiscal years, as interest rate changes cause the bank to make less net interest income. In addition, the bank's Irish clients are failing to repay loans, as Ireland's economy is drowning in debt.

Business Overview

In the past fiscal year, Allied Irish Banks turned a loss due to debt contagion in Ireland.[1] As the debt crisis consists,[2] AIB and other Irish banks may continue to turn losses.

Trends and Forces

AIB Suffers from European Debt Contagion

AIB is directly and indirectly affected by market conditions. For example, changes in interest rates could adversely affect net interest margin — the difference between the yield the bank earns on assets and the interest rate it pays for deposits and other sources of funding — which could in turn affect earnings. Market risks include fluctuations in interest and currency exchange rates, and equity and futures prices. Such risks affect loans, deposits, securities, short-term borrowings, long-term debt, trading account assets and liabilities, and derivatives. In the past fiscal year, these risks have had a negative affect on European banks, as the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) have been at risk of default.

AIB has Exposure to Lending and Credit Risks

A number of AIB's products expose it to credit risk, including loans, leases and lending commitments, derivatives, trading account assets and assets held-for-sale. As one of the Ireland’s largest lenders, AIB relies heavily on accurately predicting how well its customers will repay their loans. The corporation must constantly weigh ongoing economic factors and should they overestimate its customers' ability to repay loans, the bank's overall performance will suffer.

Competition

References

  1. AIB 2010 20-F
  2. Seeking Alpha, "The Biggest Loser in Ireland's Ongoing Debt Crisis," 12/02/2010
  3. Bloomberg, "Bank of Ireland Becomes 'Slave' to Country's Sovereign Debt Woe," 06/15/2011
  4. Retail Banker International, "Barclays overtakes RBS to rank UK no.1 by assets," 08/06/2010
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