Credibility depends on you having the courage to at least give your latest effort a chance to success, before you reach for the next measure. I would also caution that each measure that he reaches for is increasingly contentious. Things could move very quickly if he announces a QE programme, if certain countries were to insist that it was illegal. Eventually there may be a line in the sand that he finds he cannot cross. Interesting times.
As for BOI, again look to the outsider for a view on what is happening internally. I love the way that RBS can loudly declare the write-back of provisions for bad debt. One would have thought that the Irish banks would love to do that too. Except RBS isn't owned or part owned by the Irish government, nor is it subject to Irish politics. So Irish banks declaring a reduction in bad debts has to be very carefully managed. It doesn't mean its not happening though.
Ramerci, I think it's very unlikely Draghi will introduce any buying of government bonds tomorrow. He has a lot of information to deal with regarding tltro's and more importantly for bkir the asset backed bonds he is going to buy. He has to clarify the amount of securities will buy (500 billion possibly) and what type of ABS' s he will buy.
The fact that euro inflation is now at 0.3% will add extra impious to his thinking but it will have to wait until December before he will know if his measures are making any difference. One of the benefits of qe would be a weakness in the euro. That's all ready happening so he has a bit of leaway there anyway. So my thinking is that tomorrow will be all about the ABS programme.
I was away all day yesterday so I missed all the fun. Share price spiked up and then simmered back down again even though shares traded surpassed the 100mm mark. That indicates one of two things (A) a conflicting news story either directly conflicting with yesterdays news (b) an RNS with neutral to negative tidings. I don't think even external affairs will dampen SP rise however if Draghi decides to introduce European QE. Lets see what happens tomorrow. My own suspicion is that a newspaper or trusted economic expert launches the idea that Irish property market has peaked and will now level off. This is obviously not entirely negative news, yet it would cap the peak to trough theory momentum and as a result it might stagnate estimates temporarily. All this is just the fruit of an overly stimulated mind. I cannot sleep and I tried counting sheep. So in turn I ended up analysing yesterday trade patterns. My conclusions having read the most recent posts re profit guidance is that BKIR will post full year profits in excess of one billion euro as Aclaw stated but not entirely for the reasons indicated. Yes market conditions have immproved and even if the situation levels off this won't change. I think SP will exceed 40 cent even 42 cent, but I am looking forward to seeing what proportion of generated income the UK market yields.
..boi has a p/e of -13.5x with eps of -0.02; earnings could be in the range of + 0.03 & a p/e of say + 10x... That would mean the days are numbered for the current price of the 0.32 ..when p/e kicks in; the valuation is very different; no longer 'book value'...
I have some time this weekend to look over past reports 2013, look over first 1/2 2014, try to make a reasonable estimate ; what you have for the second 1/2 2014 are two variables....net interest margin may be higher than 2.05% ; the second variable are the write offs which are lower than previous estimates..if boi was scheduled to make a profit of 800 to 850mm for full year: a net income; and these 2 variables kick in; that would mean Boi could surpass the 1b net income mark with a high side of 1.35b ; so I will place an estimate for 2014 ; a range of 950mm on the low end and a high range of 1.350b for 2014..divide that with # shares outstanding..1/30 ~ 0.03 to 0.04 share; rough calculation ; if p/e kicks in; valuation goes into multiples..
..these are estimates from Credit Suisse for 2016. BOI is ahead by 2 years if I look at projected results for 2016 from CS. These are the estimates. Total interest income (estimated 2016) 2,666mm , loan provisions (est,) (587), Pre Tax profit (est.) 1,207mm ; Net Income Estimate 2016 - 999mm. -------------------------------------------------------------------------------------------------------------------------------------- these projected results are very similar to actual. In 2013 BOI had total interest income of 2,646mm. 2014 Results are expected to show a net income - higher than 850mm based on 1/2 results for 2014. However, the second 1/2 of 2014 is running ahead of first 1/2 2014; the writeoff are also much less than projected. If BOI were to free 525mm for writeoffs according to the article I posted about RBS; that would imply that adding the 525mm to revenue and the expected net income of say 850mm would push net income at BOI past the 1b mark. 850+ 525 = 1,375b net income for 2014. Much higher than forecasted. Anything over 1b would be a pleasant surprise. AIB also heded in the same direction. Total interest income 2014 also appears to be much higher than that predicted by CS as an estimate for 2016. BOI is ahead of schedule by 2 full years...
..Basing owner-occupier mortgage loan-loss provisions on market values at the end of August would free up 525 million euros ($663 million) at Bank of Ireland Plc and 440 million euros at Allied Irish Banks (ALBK), Davy estimated...
If the national picture is improving then we would have to assume the amount of mortgages boi are writing is growing at a similar pace. Considering how few houses are for sale this will only improve as supply grows over the next couple of years.
Investec: In total, 16,781 mortgages with a value of €3.0bn were approved in the first eight months of the year, which is just shy of the €3.2bn approved in the full year 2013 (18,520 mortgages). On a yearly basis(JanuaryAugust) approvals were up 53.0% , giving a clear indication in the positive momentum in activity. That strength has been concentrated over the summer months, with four of the past five months representing record highs for the series
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.