Member Info for johnmcclean

News The Irish Times reports that Bank of Ireland (BOI) is looking to acquire Covestone Asset Management which has over €100m of funds under management. BOI had to sell its asset management division, BIAM is 2011 as part of its bailout package. This is a clear sign that it is looking to expand its non-interest income within the Group. Comment Below we discuss 10 tailwinds which are benefitting Bank of Ireland’s share price at present:  A rising yield environment in Europe reduces BKIR’s pension deficit and significantly enhances its capital position. We’ve seen a large back up on the yield on the 20 year AA European corporate bond index is now at 1.81% (1.04% at September 2016).  Steepening yield curves in Europe are positive for the bank’s Net Interest Margin trajectory.  Yesterday, the ECB extended its QE programme to December 2017 covering all major political events in 2017.  The recent strengthening of the pound against the Euro is positive for UK denominated assets and profits originating in the UK. This means the Group’s balance should increase at FY16 year-end compared to September 2016.  The recent relaxation of the Central Bank of Ireland’s Macro Prudential Rules for first time buyer should help new mortgage lending growth next year. Economic data remains resilient in Ireland and the UK since Brexit, which is also helping sentiment.  The market’s anticipation of BKIR’s dividend has been brought forward given the likely reversal of the bank’s pension deficit by year-end. We forecast a H1/17 interim dividend payable in H2/17.  Last week’s announcement that BKIR’s SREP minimum capital requirement for 2017 has been reduced by 225bps to 8.0% from 10.25% is a clear positive for equity holders and AT1 bond holders.  The asset quality of the BKIR’s loan book continues to improve, NPLs as a percentage of loans should continue to decline in the near term, potential leading to further provision write backs which are beneficial to capital generation.  Negative sentiment towards Italian banking sector has improved significantly since Sunday’s referendum. Therefore, contagion fears have diminished and we are seeing an unwinding of the political risk premium built into European banking assets.  Technical momentum remains strong and a positive re-rating in the bank’s equity is underway, currently trading at 0.96x FY16e P/B.

http://www.rte.ie/news/business/2016/1209/837693-fairfax-unit-sells-more-shares-in-bank-of-ireland/ And we are still above the 23c he is selling at so obviously plenty of buyers. The liquidity in the stock is improving all the time. Just michael to unwind eventually.

Tapering is willing the argument. bond yields are rising. As long as Mario doesn't burst the bubble this could be seen as a good day and a turning point for banks.

markets are not sure what way to look at the extended qe. Is it tapering or not? 80 billion per month for 6 months was expected but got 60 per month for 9 month. its actually more of a total but the 20 per month is really tapering...or is it? Either way no budge in interest rates for a lot longer and most likely into 2019. Mario will `have a lot of questions to answer later. not doing bkir any harm yet anyway

I'm not sure what you mean by dividends includes capital gains Bruce but its time to get back on track. A few little developments worth noting. Fitch has moved BoI down from positive to stable outlook. Mainly due to brexit fears. Yesterday they did maintain a positive view on out debt so no real problem. On the positive side the bank may benefit fron developments in the UK. Lloyds and others have decided that the time of super low interest rates are over and have decided to up rates by 30bps. Its a small but important turning point and I think be good for NIM next year. On the down side. Android pay was launched in Ireland today and BoI is not ready and has no plans to integrate it. Big mistake. In a mobile world it makes us look old fashioned and not modern. AIB are even advertising their service on TV already. Tech is one area where boi is very vulnerable. i know they plan to spend billions on it but missing out on today is not a good start.

very difficult to break. Not sure if what Draghi says tomorrow will be a help or a hindrance. Clarity from him of on sorting the Italian banking mess would be good.

Not true Bruce. Give me numbers. S&P 500 60's Avg inflation=2.5% Avg dividend yeild=3.2% 70's Avg inf= 7.4% avg dif=4% 80's avg inf= 5.1% avg div=4.2% 90's avg inf= 2.9% avg div= 2.4%

I dont want to lecture you Bruce or offend Observe by giving my opinion but if you want to call other peoples views bonkers then at least you need some facts to back it up. A few quick google searches throws up the numbers below. Happy to view the info you have. US 1960...inflation=1%.....interest rate=4%....S&P =58 60's stable inf and int = steady growth 1669....inf =5%.....int =7%... S&P =102 Nixon arrives 1969 and starts to borrow and spend. 1975...inf =11%... int=13%... S&P=72 1979...inf =12%.....int =17%....S&P =99 70's. high inflation...high rates = stagnation. Policy change early 80's. 1989...inf...5%.......int =14%.....S&P = 285 1999.....inf = 1.7%....int =5%...S&P =1284 From their peak in early 80's both inflation and interest rates have been on a steady down trend to now when inflation is near zero and interest rates just above . And the S&P...at 2200.

Actually in economics 101 higher inflation leads to higher interest rates leads to lower share prices not the other way around. You can see by looking at the s and p what low inflation has done for share prices.

cantor predict that AIB will pay a dividend for H216. With Ulster already paying BoI will follow. As things stand with bond and exchange rate improvement and managements stated aim of paying one asap I would be very surprised if we dont get one for H117 and I know its foolish but I still have a tiny hope that we might get a little something in march next year. It depends on how the next 3 weeks pan out. eg. trump keeps promising to spend billions, Italy patch up some kind of government and bank deal and May and friends continue to realize the bind they are in without a soft brexit.

Tech and the internet poses a huge challenge to traditional banks in the near future but for now your statement that interest rates will never rise again is wrong. It may take a while in europe for rate to rise but the signals that QE will start to taper is not far away. The premise of QE was based on the trickle down effect. that model appears to be broken and as a result you see a huge popular revolt. they have not got their share of the dosh. The rich have got richer and in many countries with a social welfare system the benefits available have not left people any worse off. So the squeezed middle are making it clear to the powers to be that they wont stand for their lot much longer. The ECB will be forced to act to head off problems in Italy, france and of course Germany. What I would add is take Richie's advice if you are a long term borrower and FIX. if an investor get ready to protect your money in a higher inflation economy. I would also say the decks are been stacked in BKIRs favour at the moment (so long as the Euro survives).

Savers are not been rewarded for leaving the money in the bank. They are been rewarded for allowing the bank to use their money to loan out to people and businesses to fund growth. At least that was the way it should be and use to be. As for interest rates. In normal times higher rates are used to control inflation. Inflation is good for sovereigns as it reduces in real money what they owe. It is inevitable that after huge amounts of QE all over the place that some where down the line we are in for a period of higher inflation and higher interest rates. When is not for sure but without a shadow of doubt the time is coming.

i think we are a long way from Italy leaving eu. For a start Five Star have to win a majority which is not even close to a sure thing. After that they have to win 2 referendums. As its in the Italian constitution that a referendum cant be held on an international treaty they first have to have a referendum to change the constitution so as they can have the 2nd one. All the while, as with Greece, the banks will be more dependent on the ECB to keep them afloat and as with Greece, there is nothing like closed atm's to focus the mind on which side your bread is buttered on.

strange to say the Green winning the Austrian presidential was more of a surprise than Renzi loosing. Most likely they will try to keep the government going in italy but they are on borrowed time now anyway. More important to us is whats now going to happen to their banks and what effect that has on bkir. The Euro dropping against the the $ and £ is positive and will no doubt boost FY16 results and will give them a much better sheen than looked likely a few weeks ago with the IMS. Unfortunately its the speculation on the future of the euro thats going to drive the share price for a long time to come. I hope the ECB has a rescue plan in place. God knows they have had plenty of time to draw one up. Have they though? I suspect Plan B is " please God let plan A work" . With the Brexit court appeal in the news this week also its going to be a bumpy one..again

hanging chads yet.. https://www.theguardian.com/us-news/2016/nov/25/jill-stein-election-recount-clinton-trump-michigan-pennsylvania-wisconsin

"France ditto with wine although sensibly the Brits are beginning to latch on to Italian ones ". Really Bruce.. .https://www.theguardian.com/politics/2016/nov/16/european-ministers-boris-johnson-prosecco-claim-brexit Interested to read a bit on the german car deal as well if you could post that link please.

This is clearly positive news for new mortgage lending for Irish banks, however new mortgage lending continues to be constrained by the lack of new housing completions in Ireland. On the 15th November, BOI’s share price traded to a high of 23.5c, just 1% below our 12 month target price of 23.8c. This rally was driven a rising yield environment in Europe and a steepening yield curve which is supportive of the bank’s Net Interest Margin and should significantly reduce the size of its pension deficit which stood at €1.5bn at September 2016. The recent strengthening of the pound also has a positive translation effect on UK denominated assets and UK profits. The share price has retraced over the past week as investors took profits on technically overbought trading signals and as their attention shifted to the political risk of the Italian Constitutional Referendum on the 4th December. We maintain our 12 month target price at 23.8c and believe the Group will have a sufficiently strong capital position to begin dividend payments relating to 2017 financial year. 20.7c is a big technical support level in the near term we to hold in and consolidate before pushing higher.

@pgee https://www.tradingview.com/chart/D6EDXoDw/ To do any comparison you like just change the ticker in the top left box.

http://www.huffingtonpost.com/entry/jill-stein-election-recount_us_5835e45be4b09b6055fffc64 http://www.independent.ie/world-news/north-america/us-election-2016/strong-evidence-election-was-rigged-against-clinton-in-key-states-35238109.html

https://www.tradingview.com/chart/D6EDXoDw/ Getting good value from this chart site. 6 months bkir v BMPS. I know which share I'd prefer to own.