QUOTE AND NEWS
Mondo Visione  Jun 27  Comment 
Allied Irish Banks raises c. €3 billion in successful IPO Largest EMEA IPO to date in 2017 Over 40 Irish companies listed on London Stock Exchange with a combined market capitalisation of almost £150 billion Unconditional trading...
Financial Times  Jun 23  Comment 
IPO marks a milestone in country’s recovery from financial crisis
New York Times  Jun 23  Comment 
The sale of a 25 percent stake in Ireland’s largest commercial and retail lender came nearly seven years after it was nationalized by the Irish government.
Wall Street Journal  Jun 13  Comment 
Allied Irish Banks offers investors a good chance to ride the Irish Republic’s strong economic recovery, but it comes with just one snag: a still-large chunk of bad loans left over from the hard years.
New York Times  Jun 12  Comment 
The Irish government, which nationalized the bank in 2010, announced a price range for the offering this month, which will represent a milestone for the country’s banking system.
Reuters  Jun 12  Comment 
Allied Irish Banks (AIB) plans to raise up to 3.3 billion euros ($3.7 billion) when it sells a 25 percent stake on the Dublin and London stock markets in the biggest test yet of investor appetite for Irish banks.
Financial Times  Jun 6  Comment 
Patrick Jenkins and guests discuss the planned IPO of Allied Irish Banks, HSBC's struggle to move 1,000 jobs from its London headquarters to Birmingham, and M&A fees - do big banks or boutiques make the most money?
Financial Times  May 31  Comment 
Brighter prospects for property market leave room for growth
BBC News  May 31  Comment 
The float comes eight years after the bank was rescued by Dublin with a 21bn euro bailout.




 

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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