To my mind BKIR is building up a serious tail wind. There are so many positives that at some stage they are going to over whelm the biggest fly in the ointment, brexit. It has the potential to be seriously damaging to a lot of small Irish businesses. BoI has a lot of loans in the SME sector but you would have to assume they are keeping a very close eye on how their accounts will fair. I do know that SME's with UK exposure are putting plans in place to deal with Brexit. The one big danger they can't cover for is the Cliff Edge scenario. Reverting to WTO rules in two years time would be the real disaster. On that there is whispers that the WTO might be open to a special deal between the UK and the EU. Something like a 10 year period where both would be give time to draw up a new deal and avoid the Cliff Edge in 2 years, which is seen by all (except the UK) as an impossible time frame.
Leaving Brexit aside BKIR is about to enter a new era. To start with, a new boss to drive the future as opposed to Richie who did a great job saving the bank and steadying it . A dividend penciled in for next year that will open the share to plenty of funds and investors only allowed (or want) to invest in dividend paying assets. The way over due upgrade to the IT infrastructure to allow for new technologies and cost savings. The Irish economy is in a major growth phase. Employment is growing. Demand is growing. House prices are heading for the ridiculous again and a big driver of bank profits, house building, is taking off. More loans at good margins will drive the NIM as tracker rates are diluted. The increasing house prices are reducing negative equity properties at a steady pace. We are heading for a 20% from peak HPI that should produce write backs at some stage. Then we have the ECB. A change in direction there is sure for 2018. The potential from that will be the biggest positive of all for banking. The SVR may not increase for a while yet (possibly 2019) but bond prices and intra bank rates will turn positive. BoI now fund over 90% of loans with savings. When rates rise it will be a further boost to NIM. The hole in the pension will fill boosting reserves, bad loans will fall and NIM will rise. All in all you would have to be very bullish on BoI shares.
SP under attack again on low volumes, the worst bank share in Europe by far today and already from a pathetic low, have to agree with John Mc' s theory about this all being connected to AIB coming back to the market. Some big boys effing us about in a big way.
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