According to the Irish CB the difference between loan pay back and new loans drawn down is close to 500million for the month of May. Households have reduced debt by 2.4 billions in 5 months. There's 3.7% less borrowing YTD.
When boi release the half year figures in a months time, lending could be a black spot. Hopefully the UK will make up for the Irish figures. To make money banks need to lend and in boi case it's extra important. That NIM needs to push on to 2.5% and writing new profitable loans is key.
With a CT rate of 12.5% I presume the value of the DTAs are 1.25bn (using the 10bn threshold). IF this was guaranteed by government at a CHARGE it increases the capital base by the same amount as the asset entry. This would then a very neat way for the 1.4bn preference shares to be repaid without the need for some other form of capital raise. The value of the government shareholding would go up and another uncertainty for BOI removed, everyone gains. Surely a decesion like that is a no brainer. This is where Richie being so belligirent with the Dail & lacking conventional & accepted charm pays a price I suspect
An article in today's indo points out that boi can earn 10 billion in profits before it has to pay a cent in corporation tax. Under eu rules the credits can't be added as assets to their balance sheet. However both Spain and Portugal's government have guaranteed the deferred tax credits allowing them to be added as assets.
Irelands dept of finance have denied they will do that but added "its a possibility". It would however be seen as a type of supplementary or even second bale out, but a free one really. Useful as a reserve but probably not needed.
Regardless of adding it to the balance sheet it still demonstrates how quickly boi will be able to progress once it has all its ducks in a row.
The last element of our capital considerations relates to our issued ordinary shares. As you are aware, AIB currently has in excess of 523 billion shares in issue, 99.8% of which are held by the National Pensions Reserve Fund Commission on behalf of the State.
In any circumstances, this represents an extraordinary number of issued shares, but particularly so in the context of an eventual return to a simplified capital structure.
Therefore, as we head towards such an eventuality, the bank will consider undertaking a consolidation to effect a significant reduction in the number of shares in issue. This would require the approval of shareholders in due course.
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