Seems to be returning to the stable, nice little uplift over the last couple of days for our little trotter - then Turkey puts its foot in - WITH RUSSIA. Now let us see how statesmanlike our little bully from Russia is - don't imagine they are too upset in Holland tonight.
Recent events in Paris - God help them and their families - do not seem to have dampened our little pony's canter so let us hope that the cowboys from Russia can now contribute to some sort of solution - they needed a jolt anyway after their performance in the Ukraine - this upset for them was overdue.
The nation is buoyant, and its banks are benefiting Ireland is more than a low corporate tax rate, though Pfizer — which has bought a $160bn ticket to Dublin by buying Allergan — may not yet know it. Start with the economy, which grew at 7 per cent in the first half of this year. This can only help the country’s banks, once emblems of the financial crisis. Bank of Ireland this week announced plans to redeem the final €1.3bn of preference stock first issued to the state in 2009. Read that as regulatory approval of its capital structure — and capital generation. Retained profit added 40 basis points to its capital ratio last quarter, before adjustments for pensions and foreign exchange dragged the ratio back down. Dividends remain a few years off, but are coming closer. Allied Irish Banks, still nearly 100 per cent state-owned, has returned to the bond market for the first time since the crisis, hoping to repay its own prefs. Dublin plans to start selling its AIB stake next year. Lossmaking Permanent TSB, still 75 per cent state-owned, cannot follow suit just yet. BoI is the best play on Irish buoyancy for now — even if, at 1.2 times tangible book value, the good news looks priced in. True, it is not a pure play on Ireland, where it accounts for half the market. Two-fifths of its balance sheet is exposed to the UK, where it provides the Post Office’s banking backbone. But what counts are its revenue drivers. BoI’s net interest margin crept up to almost 2.2 per cent in the third quarter. Though growth in net lending is hard to come by, new loan demand is rising. BoI has, for example, half of the auto finance market, which has enabled it to capture the 40 per cent increase in commercial vehicle sales this year. Battle-hardened regulators remain a force in Irish banking. They still set mortgage loan-to-value ratios — as if intense competition were not a big enough obstacle to loan growth. BoI, then, is Ireland in a nutshell: a well-placed bet on a market returning to normal after its darkest chapter, with all the pressures that implies.
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