QUOTE AND NEWS
Forbes  Nov 20  Comment 
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The Economic Times  Oct 7  Comment 
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SeekingAlpha  Aug 14  Comment 
By Night Heron: The ADRs of Allied Irish Banks (OTCQB:AIBYY) are nearing the end of a long, strange trip. Until April 2012 AIBYY was a normal ADR, with each ADR representing ownership of 10 underlying shares of Allied Irish Banks (IRE:AIB). These...
Wall Street Journal  Jul 30  Comment 
One of Ireland's dominant lenders Allied Irish Banks, which avoided collapse during the country's banking debt crisis, posted its first profit since 2008.
BBC News  Jul 14  Comment 
The chairman of the Co-operative Bank, Richard Pym, will stand down later this year to lead Allied Irish Banks.
Financial Times  Jun 27  Comment 
Court rules that AIB could enforce judgment against the former media tycoon and Ireland’s first billionaire over personal debt of €22.6m
Wall Street Journal  May 12  Comment 
Allied Irish Banks, one of the few Irish lenders to survive the country's banking crisis, is the second of the country's dominant banks to say it has returned to profitability.
SeekingAlpha  May 3  Comment 
By Night Heron: The American Depositary Receipts (ADRs) of Allied Irish Banks (OTCQB:AIBYY) may be the most misunderstood ADRs in the US. Until August 2011, AIBYY was a normal ADR. Each share of AIBYY traded on the New York Stock Exchange and...




 

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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