When will heads roll at the very top of Irish Banking?

andrewdeerpark

I see today as part of the Britsh bailout almost all the top people have been removed from their respective institutions.

http://news.bbc.co.uk/2/hi/business/7666570.stm

Plus the troubled bank in Germany removed their top man.

Of course here in Ireland 2 weeks after our grand bailout not one individual at any bank has lost their job.

The brazen attitude of our CEO's & Chairmen is to ride out the storm with no shame or remorse blaming international circumstances.

At least one banking individual should be out of a job.

Where is the public outcry and necessary cleaning witchhunt?

todolist

The Irish are docile passive people.Hence the third world health service,white collar criminals never go to jail.The Irish have no anger,no passion.

Baird

UK bailout cost billions.
German bail out cost 470bn
French bailout is costing 300bn
Cost so far of the Irish bailout........free.
Carlsberg dont do bailouts.....


But seriously why should the heads of the likes of AIB lose their jobs because the global
money markets shut?
They operate an exceptionally well run bank which even with 200bps of bad debt charges will generate profits this year.
The same is true of Anglo and BOI will still generate profits with 150bps.
This is inspite of "the reckless lending" as commentators constantly talk about.
Without the lending the likes of Anglo and BOI provided to the commercial and property
divisions of this country we would still be in the same position we were 10 years ago.
People dont realise that 1 or 2 bad years will not cripple these banks far from it.
They have the capabilities to generate billions for years if they provide no more loans
However if they do that the economy grinds to a hault.
Riskier business models like Anglo are fully understood by their shareholders but
as a result they make their shareholders lot of money. They also had a multiplier effect
on the economy which basically put us on the map as it were. We would all still be a
middle of the road peripheral country without this lending and if it was not provided
by the Irish banks it would have been provided by UK banks at higher rates.

People should stop listening to people like McWilliams and Hobbs and actually think about
what they are saying.
If the banks go bust or are nationalised they should lose their jobs, but until then why should they?
I have used the example of michael o leary in another thread but you could also use the
example of liam o mahony at CRH. Both these companies have seen their share prices
battered yet they are both exceptional managers.
Should they lose their jobs due to factors completely outside their control?
No they should not and in my opinion neither should any bank manager in this country.
For the 50th time in this forum bad debts to developers are not the reason that the
banks have been almost wiped out, its a sympton of a complete freeze of the global
credit markets.

andrewdeerpark

Well Baird a fairly comprehensive argument their but...

Individual Banks
You are correct in not taring all with the one brush no doubt the following banks are relatively blameless in the current crisis (excluding the RBOS and Danske presence)
- ACC - no issues an old style bank with the least exposure
- AIB - apart from the old Rusnak affair generally fine
- PTSB - slightly overexposed to wholesale money market
- BOI - maybe a bit larger exposure to the commercial property market

However the top 2 contenders for mal practice are:
- Anglo Irish
- Irish Nationwide

Anglo Irish & Irish Nationwide
The arrogance of its chairman Sean Fitzpatrick in Marion Funicane last week beggar’s belief; here is a bank which bet heavily on large commercial players constantly, not seeing any possible crash scenario. Take a drive through the country: every city, town & cross road is full of office blocks business parks and land banks lying idle and you are telling me that's an international problem?? Plus high street retail is in serious trouble with the English corporates cutting branches and small shops priced out of the renting market because of this greed of high rent and bleeding the tenant in the quest for larger profits and bigger deals. Remember an acre of land sold for over 60million in Ballsbridge, the highest in the world at the time in a small country of 5 million. Also they have the double in whammy in that England is in as bad a state as us with commercial property falling just as fast.

This was largely fuelled by cheap easy access to credit for a select few.

Ditto for Nationwide except they sought less guarantees than Anglo. At least they know they are wrong and are keeping quiet instead of peddling the old phrase of "fundamentally sound".

Also if general press speculation is to believed it was Anglo Irish that caused the crisis last week and necessitated the secretive government bailout. In a true market such a small player with no retail presence should have been left crash and burn and its high roller shareholders with it.

Its also not true to say the bailout was free as most rescued banks will need to be recapitalised by the government so a British style scheme is on the way, if not the share price of Irish bank will go nowhere and they will not be able to get access to capital, we will have to follow Europe with a scheme for our banks aswell, just you see.

In England if you wake the chancellor of the exchequer out of bed you loose your job while in Ireland you can ring our minister for finance anytime, call back the dail, and put a 100K guarantee against every individual in the state and no resignation. What a banana republic.

Plus Shane Ross's article on the situation in the indo is worth a look he sums it up far better that me.

http://www.independent.ie/opinion/columnists/shane-ross/pussycat-paddy-is-for-the-birds-1496594.html

Diarmuid

Baird wrote: »

the
example of liam o mahony at CRH. Both these companies have seen their share prices
battered yet they are both exceptional managers.
Should they lose their jobs due to factors completely outside their control?
No they should not and in my opinion neither should any bank manager in this country.

I wouldn't be so fast to exonerate them though. With the banks we still don't know how much bad debt they hold on their books. When the liquidity returns to the market hopefully we will get to see if they were swimming naked.

Baird

andrewdeerpark wrote: »

Well Baird a fairly comprehensive argument their but...

Individual Banks
You are correct in not taring all with the one brush no doubt the following banks are relatively blameless in the current crisis (excluding the RBOS and Danske presence)
- ACC - no issues an old style bank with the least exposure
- AIB - apart from the old Rusnak affair generally fine
- PTSB - slightly overexposed to wholesale money market
- BOI - maybe a bit larger exposure to the commercial property market

However the top 2 contenders for mal practice are:
- Anglo Irish
- Irish Nationwide

Anglo Irish & Irish Nationwide
The arrogance of its chairman Sean Fitzpatrick in Marion Funicane last week beggar’s belief; here is a bank which bet heavily on large commercial players constantly, not seeing any possible crash scenario. Take a drive through the country: every city, town & cross road is full of office blocks business parks and land banks lying idle and you are telling me that's an international problem?? Plus high street retail is in serious trouble with the English corporates cutting branches and small shops priced out of the renting market because of this greed of high rent and bleeding the tenant in the quest for larger profits and bigger deals. Remember an acre of land sold for over 60million in Ballsbridge, the highest in the world at the time in a small country of 5 million. Also they have the double in whammy in that England is in as bad a state as us with commercial property falling just as fast.

This was largely fuelled by cheap easy access to credit for a select few.

Ditto for Nationwide except they sought less guarantees than Anglo. At least they know they are wrong and are keeping quiet instead of peddling the old phrase of "fundamentally sound".

Also if general press speculation is to believed it was Anglo Irish that caused the crisis last week and necessitated the secretive government bailout. In a true market such a small player with no retail presence should have been left crash and burn and its high roller shareholders with it.

Dont believe everything you read in the press.
If Anglo was so reckless and AIB so prudent in their lending then why from
their high in the past 12 months to yesterday are both banks down 80% each?
Irrational you would have to agree and the reason is every bank is being
treated as having giant bad debt problems and huge liquidity problems.
The banks share prices are nothing to do with their management and not
even a direct result of lending practices. If they were there would be a huge
difference in the losses seen by AIB and Anglo.
The majority of the impact on the share price is from factors which the banks
have no control over ie global investor sentiment, global recession, shut money markets.
No bank unless they have 90% of their loans covered by deposits like HSBC
can be happy in this environment. Their share price recently hit an all time
high. The reason is they dont need to access the money markets as they
have billions upon billions on deposit.

Its also not true to say the bailout was free as most rescued banks will need to be recapitalised by the government so a British style scheme is on the way, if not the share price of Irish bank will go nowhere and they will not be able to get access to capital, we will have to follow Europe with a scheme for our banks aswell, just you see.

So far our bailout has no cost a cent.
Unless there is a need for capital injections into the banks then it will remain free.
I think some of the bad debt quotes are absurd, 500bps or 800bps
That would be much higher than the Finnish or Swedish crashes in the 80s ffs.
These were far FAR worse situations that ours.
Assuming 200bps which is more than twice all the banks worst case senarios
then the Irish banks dont needs capital to be injected
They would still be profitable (BOI would break even or have a slight loss)
They would allow them to replenish their Tier 1 in the usual way.
Just because the English banks need capital doesnt automatically mean we do.

In England if you wake the chancellor of the exchequer out of bed you loose your job while in Ireland you can ring our minister for finance anytime, call back the dail, and put a 100K guarantee against every individual in the state and no resignation. What a banana republic.

100k would mean every bank in the state goes bust.
That is a laughable thought at best.
The guarantee will never cost a cent directly, it will have some indirect
consequences for our gov bond prices but the positives FAR outweight the
negatives in this regard.

Baird

Diarmuid wrote: »

I wouldn't be so fast to exonerate them though. With the banks we still don't know how much bad debt they hold on their books. When the liquidity returns to the market hopefully we will get to see if they were swimming naked.

We dont know for sure but we have a fair idea.
Sensationalist broker reports from merrion claiming nearly 400bps in bad debt charges or the broker whose name escapes me claiming 800bps.
If these figures are accurate even though they in no way try to validate their claims then all 4 banks will go to zero no matter what the capital injection.
Do you honestly think 8% of all loans in ireland will become bad debts?
I sure as hell dont, the worst they have ever been is 50bps AFAIR
Brokers are releasing more and more negative notes to get heard at this point.
You get no headlines for being middle of the road but if you are the most
negative in the market then everyone talks about you.
Its shocking really.

DJDC

Do you honestly think 8% of all loans in ireland will become bad debts?
I sure as hell dont, the worst they have ever been is 50bps AFAIR

I'll take note off that and see what happens over the next year or so.

People need to remember AIB, BOI and Anlgo arent investment banks, they are retail/commercial banks with tiny capital markets divisions compared to the big boys in London, NYC and Asia. Their employees arent paid anywhere near as well because they dont take the risks or have the capabilities to take those risks.Therefore you cant compare RBS,Barclays,Lehman Exco to AIB,Anglo Exco. Its like comparing the preformance of a Ferrai F1 driver to the preformance of a granny driving a clapped out Lada.

Baird

DJDC wrote: »

I'll take note off that and see what happens over the next year or so.

People need to remember AIB, BOI and Anlgo arent investment banks, they are retail/commercial banks with tiny capital markets divisions compared to the big boys in London, NYC and Asia. Their employees arent paid anywhere near as well because they dont take the risks or have the capabilities to take those risks.Therefore you cant compare RBS,Barclays,Lehman Exco to AIB,Anglo Exco. Its like comparing the preformance of a Ferrai F1 driver to the preformance of a granny driving a clapped out Lada.

Well said, they dont generate the wealth because even Anglo didnt take
anywhere near the risk that some of the bigger Uk and US banks did.
No matter what, a building will always be an asset and will never see its value
fall by 90% in 12 months. Financial instruments like CDOs however can.
Irish banks have next to no exposure to any of these instruments.

daveirl

This post has been deleted.

andrewdeerpark

Isn’t it amazing here we are all quoting rumour and gossip 2 weeks after giving the state guarantee; not enough concrete facts and figures have been made public for general debate? Remembering banks deal in figures!

Also seeing the financial regulator being minced by Mark Little does not encourage confidence in our paid public service sheriff doing his job and protecting the state guarantee.

Note the stamp duty cut on commercial property to 6% to help out our poor banker developer friends and maybe aid them in their disposal of these wonderful assets, which will never become worthless!!

Remember most commercial property is only over priced hay barns with water, sewage, communication and electricity. Plus those overpriced land banks, there is no telling how low their asset value could go if the recession turns to depression like your high risk CDOs?

Time to reassess these banks asset quality, of stick our head in the sand and hope it all goes away.

Baird

daveirl wrote: »

This post has been deleted.

Dave do your homework
Danse actually put the charge at 350bps with an 80% provision.
This is standard accounting practice in Denmark but is not allowed in Ireland.
In other words they see the bad debt charge at 70bps and have put the rest
aside to cover future bad debt charges.
Thats the actual truth so it most definitely is sensationalist, reckless and
dangerous the amateurish note that merrion released on the back of that figure.
This is something the regulator should be acting on.
He is a harmless bystander at the best of times so thats why things like this
are not punished in the Irish market

daveirl

This post has been deleted.

Baird

daveirl wrote: »

This post has been deleted.

Merrion are reckless and illinformed at the best of times and that is being kind to them.
They have recently got a new banks analyst who released two notes recently
that he should have printed in the Sun or perhaps the News of the World.
Calculations were wrong, addition and subtraction errors in the models and
figures which he plucked out of thin air used to back up his arguments.
Disgraceful stuff from a professional broker
If that is the top of the standard pile from the Dublin brokers then it really is a sad sad day for analysts who work in this country.

goodcitizen

andrewdeerpark wrote: »

I see today as part of the Britsh bailout almost all the top people have been removed from their respective institutions.

http://news.bbc.co.uk/2/hi/business/7666570.stm

Plus the troubled bank in Germany removed their top man.

Of course here in Ireland 2 weeks after our grand bailout not one individual at any bank has lost their job.

The brazen attitude of our CEO's & Chairmen is to ride out the storm with no shame or remorse blaming international circumstances.

At least one banking individual should be out of a job.

Where is the public outcry and necessary cleaning witchhunt?

With a population of 4.5 million and one major city in the country, all these goverment ministers, property developers, bankers and business tycoons probably know each other anyway from mixing in same social circles.

There's nowhere near as many of these highrollers here than in Britain so they form an ' Old Boys Club' and they know that if they co-operate with each other, they each stand to make a lot of money.

With Fianna Fail in on the act there is nothing to stand in their way and there you have it, brown envelopes in the past between developers and Fianna Fail, brown envelopes now between bankers and Fianna Fail who knew Fianna Fail would get them out of this mess anyway.

Fianna Fail go on television talking bull**** about monitoring the bankers who in reality are their friends just like the builders and property developers who they helped out in the budget and who in turn are friends of the bankers and round and round it goes. It's AIB alright, more like Allied Irish Bastards.

stepbar

goodcitizen wrote: »

With a population of 4.5 million and one major city in the country, all these goverment ministers, property developers, bankers and business tycoons probably know each other anyway from mixing in same social circles.

There's nowhere near as many of these highrollers here than in Britain so they form an ' Old Boys Club' and they know that if they co-operate with each other, they each stand to make a lot of money.

With Fianna Fail in on the act there is nothing to stand in their way and there you have it, brown envelopes in the past between developers and Fianna Fail, brown envelopes now between bankers and Fianna Fail who knew Fianna Fail would get them out of this mess anyway.

Fianna Fail go on television talking bull**** about monitoring the bankers who in reality are their friends just like the builders and property developers who they helped out in the budget and who in turn are friends of the bankers and round and round it goes. It's AIB alright, more like Allied Irish Bastards.

Powerful stuff there.... :rolleyes:

Everyone's a bastard, WHAAAAAAAAAAAA!!!! <throws toys out of the cot>:rolleyes:

daveirl

This post has been deleted.

Slutmonkey57b

daveirl wrote: »

This post has been deleted.

As stock sales are based inherently on speculation I would be inclined to go with the man whose analysis isn't riddled with basic errors of numeracy instead of the guy whose random guesses have been proved to predict the sheep's movements so far (predicting bank stocks are going to go down given the last six months isn't what I'd call inspired interpretation).

pocketdooz

goodcitizen wrote: »

With a population of 4.5 million and one major city in the country, all these goverment ministers, property developers, bankers and business tycoons probably know each other anyway from mixing in same social circles.

There's nowhere near as many of these highrollers here than in Britain so they form an ' Old Boys Club' and they know that if they co-operate with each other, they each stand to make a lot of money.

With Fianna Fail in on the act there is nothing to stand in their way and there you have it, brown envelopes in the past between developers and Fianna Fail, brown envelopes now between bankers and Fianna Fail who knew Fianna Fail would get them out of this mess anyway.

Fianna Fail go on television talking bull**** about monitoring the bankers who in reality are their friends just like the builders and property developers who they helped out in the budget and who in turn are friends of the bankers and round and round it goes. It's AIB alright, more like Allied Irish Bastards.

Cliff Notes : The world's not fair and I'm happy to moan about it instead of actually doing anything.

I hate the man in the big house on the hill .