Companies do not link their operational business decisions to the pension deficit issue. The latter is an on going moving target that depends on non operational criteria and in any event is recognised as something that caters for an on going future payment scheme......there are many government schemes that are defined unfunded and rely on continued existance to actually meet future liabilities. In the world of banks it (pension deficits) has only come to the fore under stress testing and in this scenario is viewed as one additional charge against their capital. It is not a live ratio!! As to whether BoI follow through with a dividend announcement we will see. There is nothing operational that should stop them. Profitability will be off its high due in large to the Brexit position but a bank of BoI's size producing profits of Eur900m pa is in top shape and can can/should start up a dividend. There are few banks in Europe today that are anywhere near the profitability of BoI and have a balance sheet that has weathered and sorted the problems faced in the crisis. Good management must now move forward with good decisions. Not the meaningful buyback of shares this afternoon....short hitting the road???
The only person that think Merkel is right is herself and her friend down the road Francois Hollande These people decided Brexit not stupid voters I voted to stay in but looking back it was greed on my part,the out voters were more in tune with with what's coming Best of look all on Friday
On Irish times article and j. mcclean ....interesting read.... Also deutchebank had 16 million profit , at least it didn't go in the red considering it's probably peaked with restructuring and write downs etc...
Half year results dont really tell the Bkir story for this full year. H2 always tends to be better. We already know the pension has been re-rated so the knock on effect will be a drop in CET1 from11.2% to between 10.5 and 11%. However even if the pension problem stays static the CET1 should still be above 11.5% by year end, well above the 10% required.
NIM Best we can hope for on friday is no change at 2.11%. this will almost definitely improve by year end. The bank has resisted any SVR changes and will continue to do so. Based on the fact that tracker numbers continue to reduce and new mortgages and personal loan rates continue to grow with a higher % rate and the fact that a 1 billion CoCo at a 10% rate will be redeemed (possibly on Friay) the annual NIM should be closer to 2.15% by year end.
New loans will grow steadily but the stg exchange rate and loans been repaid will leave it a 0 sum game. Pity, that should have been a major bright spot. Stg exchange rate has reduced the loan book by just short of 5 billion. What we dont know is how the bank have hedged this risk so it may take FY results to get a clearer picture.
The bank will book a 75 million gain from the Visa sale but some of that will go on extra regulatory costs (40mil for full year). 110 mill saved on interest payments on pref shares. Potential for write backs is good. Currently BoI are at 48% on the HPI while the present rate is 33%. I think ever 1% is worth 40million.
Dividend I still hold out hope of a small one next March. present share price means nothing but sterling does. If the bank thinks it will stabilize where it is now there will be one. The figure for year, end if they go as expect and the UK and IRL economy's don't fall off a cliff would still allow for one. On top of that and very importantly it is a stated strategic long term policy of management to pay one this year. Too date they have delivered on every stated goal on time. That just the way I see it. If they choose not too I wont be surprised and in ways I agree with Hotdogs that its debatable how wise it is to pay one this year. Time will tell.
In my opinion this is as low ( 17 cent to 20 cent) as the shares will go, even shorters would be taking too big a risk to go lower. The results on Friday will show, i feel, a fall from last year, but will be largely positive, the one bad point (Pension) was given last week I feel that was a strategy move to dump bad news prior to the good news.
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