focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Let me put it another way.If the capitalised value of AIB is 10b and BKIR is 5b then over time to equate value, the two must gavitate to equal value. The two values have moved a bit in the past while but there was a point at the time of the AIB IPO that AIB was roughly double the size of BKIR. The two banks are Irish based (BKIR a quirk at the moment being in the UK and faced with the Brexit mess), fighting for the same growth and same products. Neither are going to change their present mixes by much, but if Brexit moves on and things settle the BKIR has the ability to push growth, AIB not.
In this scenario why should AIB be priced at 2:1 against BKIR. Look at the NAV for an exact measurement and then sell the AIB share down to the BKIR NAV or buy BKIR up to the AIB NAV. The two must meet. That is a simple fact and simple economics.
Look at the NAVs. You cannot buy AIB vs BKIR. Going forward (you can't put a time on it) the AIB share price will half (give or take) vs the share price of BKIR.
The AIB IPO was the worst priced offering of 2017/18. Absolute rip off. BKIR has a few image problems and a business in the UK which is adversely affected by Brexit, but value wise it is massive. I have never seen a bank as clean as BKIR ever trading where it has been in the past 9 months. Just plain stupid!!
Tick on the reasons for the rise in the SP
1) The shorts covered in the lunacy of the move below 5 on results day!
2) The manipulators drove the share down under 5 on results day and ripped the heart out of the suckers who fell for it!!
3) The realisation that a no deal Brexit is of the table and therefore doing business in the UK going forward is no different to doing business in Ireland....just better volume!!
4) That Eisman's short fund for financials actually bought back shares already shorted and will soon declare itself to be a long only fund!!
Tick, tick, tick tick!!!
Biggest manipulation on record!
Simply unbelievable that they get away with crashing the price on nothing and then taking everything on offer to cover their shorts. Criminal if you can get proof.
One really has to question this equity market. Same in the States! A joke but people''s money in it at risk!!
The share price reaction to the FY results is unfathomable.
Capital ratios.....tick
Cost ratios.....tick
Lending ratios....tick. Some caution ahead of a brexit deal in 2019 but nothing pointing to a decline or net lending decline.
Dividend increase....tick
NPL decreases....tick. heading down to a 5% ratio in 12 months is highly commendable.
NIM.....decline to 2.20% for FY 2018 and expected further decline to 2.16 in 2019. This NIM remains a remarkable achievement given the tribulations of dealing with a Draghi infused lunatic asylum at present and most likely for the remainder of 2019. Show me one bank in Europe that is boasting of an increase in NIM....the whole trend is to chase other fee income until Draghi is driven from office and sanity returns. The absolute PBT number needs to be looked at and that needs to be compared to historical results and expected results. Investec is harping on about this today but one wonders if their analyst is just jumping on a point of specific weakness or is just clueless with how a bank operates. Davy response is a lot more measured.
Comment about structure revamp....no comment about exiting the State stake.
Buybacks....no comment on this alternative deployment of surplus capital. Pity they do not focus more on this. Definitely need to shake the inherent short in this share.
Sale of its UK credit card business.... nothing in the commentary. Don't know where that rumor came out off!!
All in all an outstanding set of results. Buy in as much as you can carry below Eur5.
Be aware of the move upwards from here, be sharp and not short!!
Deal will be struck with EU for Brexit....with the backstop deal intact (give or take with legal niceties) and Labour support in the Commons (May will be gone shortly thereafter). Yesterday's vote in the Commons confirms the play!
Run in to FY results happening. Going to be a cracker and hopefully a sharp hike in dividends. Management have to sell the dividend story from here on as growth strategy not going to work looking forward.
Message is clear....this share price is too low and a rebound to NAV 1:1 is on the cards! What is that number.....7.70!!!!
Breaking rumour that ECB will react to sub euribor rates impacting banks in March meeting. Acknowledgement of what they have been told for the past three year and refused to act...the lunatics led by Draghi!!
Indications are that the rate set for bank activities with ECB to be reset to 0% to 0.25%, up from -0.40 to 0%. Any offering of targeted LT Loans to the bank to be negated by reduction in ECB balance sheet number currently being reinvested.
Huge positive for the sector...if it materialises!
This share is maxxed out on the downside. Closes are being manipulated to fixed at lower levels than the market close, sign of shorts being protected. Beware the next move up....irrespective of the Brexit vote/outcome! The worst of the UK dilemma is factored into the price already!!!
Capital Group back selling today (see RNS). They seem to have taken the blunt force approach, ignore the fundamentals, screw the client money you have to perform on and seek not the replacement institution that would likely remove you from your position without caning the market. One wonders why they are in business!!! Beware that name should you be looking to outsource any of your investments in the future.
Early days but interesting that their new wave of selling was absorbed between 4.95 (end pricing) and 5.12( early pricing).
Note that Capital Group out of the US sold off close to 1% of its holding in BKIR (still hold 4.98%). Most likely accounts for the weakness from about 6.00. No one stepping up to take their order in one go.
Would love to chat to their analyst over there to figure that decision.....buy high and sell low!!! Good riddance and hope they don't come back!!
Time to kick back?? Next week will tell.
Highly unlikely that the acquirer would delist the share and therefore choice to remain is there. The buyer would have lined up a number from existing shareholders to satisfy his demand... before announcing the offer. A total buyout would mean either a cash payment or shares in the predator....wherever they are listed.
With the scars to show for the early buys!! Regrets no....perhaps helped by having zeroed my previous holdings between Jan and Aug.
I get the Brexit circus and the continuation for some time, all things being equal. I do not get the correlation factor with BKIR. For a bank with 60% of its business in Ireland but being marked as if it had 100% of its business in the UK simply does not make sense. In most cases you would go back to the b/s and income statement to look for problems/issues. Nothing to see and indeed a lot to believe....E800m pa annuity! So what else can be going down? Weak shareholders (government?) , legacy negativity? (most likely judging from this site) or a concerted play to drive value down on a share that finds itself caught up in an one in a generation political event across in the UK. Because it has the negatives of shareholding it lends itself on a weighted factor (or manipulation as some on this site would argue). The most likely outcome of this is predatory takeout.
Where the price gets to....who knows. It has broken any rational trading levels now so my guess it is to the point that the predators have set as the takeout number. No existing core shareholder prepared to build their holding (rather looking over their shareholders to sell) means that the predator will push more but down here we are now I will guarantee there are visitors from the mainland already beating the door at HO!!
In reaching 5.00 yesterday (some available down there in late afternoon trades) the bank traded at 0,65 NAV. From a high of 8.20 in Jan 2018 to yesterday's low the SP is down 39%. The total value of BKIR is now E 5billion. What destruction of value in a share that is producing NI of E800-850m pa. The market has truly lost it!
At current levels and there is no debate on the numbers it has to be a takeover target. It has no corporate legacy and is now a fully fledged retail bank running in Ireland and the UK. Coming out of the UK PO for whatever reason (and there is no sign of this happening) is not the end of the world. They have to change a platform not a business. It is not a credit event, it's a business event! Look at Barclays. They are exiting investment banking and building retail banking. They have entered Ireland and will build on the same model here. Look at HSBC. Only UK bank trading at a NAV premium of 1.1:1 How attractive to buy a top rated retail business in Ireland and the UK at 0,65. Rich rich rich.
I cannot see this crazy game continuing for long. There are no shortage of bank looking for this exact fit and getting it at a 35% discount is just too good to believe. Hold onto your seats. This cannot play on!!!
I have to say, watching price action since Friday there is some crazy moves. Levels are reached and then you get negative price moves (sometimes 3c) on like 200 shares. Why would someone hit the bid 3c lower on 50 shares when the price is trading higher on thousands of shares. Just doesn't add up! Back in the day this was methodology to suppress a SP using minimal volume. Really unusual that it is still happening, or appears to be!!
Well after a lot of volatility we reach a line in the sand! 5.78 represents an NAV of 0.75. European banking in totality is trading at an ave NAV of 0,8, some outliers, such as Deutsche down at 0.3, Barclays (currently being shorted by some American) sub 0.5.
The market's obsession with linking BKIR to Brexit with a 1+ correlation is hard to comprehend. In a way the market is now valuing the default ratio on the bank's UK business at close to 60%. Is this reality? Is it even comprehensible, even if the UK crashed and burned its way out of Europe? Sure the growth rates of business are low and the Irish market is not going to set the world on fire but which bank with similar credentials as BKIR can offer a annual annuity of circa Eur 800m?
One wonders what event will reverse the bear market that most have waited for and indeed urged for in the past year but what is very clear is BIRK has a very clear head start, at current levels in avoiding further discounts!!
Now is the time to top up, fill up with value. Buy on!!!