Bank of Ireland announce €650m profit

Antrim_Man

This last 6 months alone :eek:

Somebody remind me why tax payers are bailing these gangsters out

http://www.rte.ie/business/2008/1113/boi.html

craichoe

Antrim_Man wrote: »

This last 6 months alone :eek:

Somebody remind me why tax payers are bailing these gangsters out

http://www.rte.ie/business/2008/1113/boi.html

Its not a bailout, its a guarantee on Deposits to stop a run on the banks, ala Northern Rock.

I think your getting mixed up with Fannie Mae.

ixoy

They're not getting a cent unless it's needed. It's a contingency measure for which the banks have to pay into.

ytpe2r5bxkn0c1

I'm no lover of the banks but I'm p'ed off with people going on about us bailing them out. They have not got a cent from us just a guarantee that they will be paying for!:mad:

dudara

Antrim_Man wrote: »

Somebody remind me why tax payers are bailing these gangsters out

As many people have said, we are not bailing the banks out in this country. The Irish government is providing a guarantee on bank deposits. The banks have not received a penny of this, and will not, until they are in need.

In fact, the banks actually pay money to the government in order to create a reserve to fund this deposit.

The bank may have a pre-tax profit of €650, but this is down by 32% from previous years, so they are being impacted by the economic climate. The bank is also not paying a dividend to its shareholders.

This psost is not a Consumer Issue -> moved to Banking & Finance & Insurance

dudara

eden_my_ass

Just to knock home the point, from another article, its easy to see that the banks still turning a profit is actually good news for us as taxpayers since;

"Bank of Ireland will pay about €115 million to the Government a year in return for State guarantee of its deposits. "

http://www.irishtimes.com/newspaper/breaking/2008/1113/breaking10.htm

redroar1942

eden_my_ass wrote: »

Just to knock home the point, from another article, its easy to see that the banks still turning a profit is actually good news for us as taxpayers since;

"Bank of Ireland will pay about €115 million to the Government a year in return for State guarantee of its deposits. "

http://www.irishtimes.com/newspaper/breaking/2008/1113/breaking10.htm

Sorry a question: I understand the banks are all paying into this fund as the post above states, say the unthinkable happens and one of the big ones goes under and all of a sudden we need 100billion (random figure) to "bail" them out where does the balance come from? Is the 115 million BOI are paying going to some sort of Banking insurance company ?

Basic question but would like to know the answer.

Antrim_Man

OK but its tax payers money that is guaranteeing these guys, and no doubt we will now be asked to stump up in banking charges to help their ailing profits :rolleyes:

BuffyBot

I've deleted some inflammatory trollish stuff. Let's keep this clean folks.

Read the forum charter if you're not familiar with the rules.

dotsman

redroar1942 wrote: »

Sorry a question: I understand the banks are all paying into this fund as the post above states, say the unthinkable happens and one of the big ones goes under and all of a sudden we need 100billion (random figure) to "bail" them out where does the balance come from? Is the 115 million BOI are paying going to some sort of Banking insurance company ?

Basic question but would like to know the answer.

If one of the big banks is allowed fail, the last thing you need to worry about is the guarantee (learning to hunt for you dinner with a bow and arrow would be the top of your priorities;)).

With regards all the 400 billion figures etc. Those figures are only true on the basis that single person who currently owes the banks money all declare bankruptcy at the same time and the value of all their collective homes/business/savings/investment/other assets are all worthless (ie zero cent).

Antrim_Man wrote: »

OK but its tax payers money that is guaranteeing these guys, and no doubt we will now be asked to stump up in banking charges to help their ailing profits :rolleyes:

I'm not aware of any banking charges increasing as a result of this guarantee. Basically, the purpose of the guarantee was to prevent the banks running out of money over the next 2 years (either due to a run on the bank or from international banks refusing to lend to the irish banks). It is to allow the banks time to shore up capital and write off their bad debts, before being able to stand on their own 2 feet again.

The guarantee is not the overall solution solution. It is merely a short-term, necessary prop up to allow the banks fix their own problems. The next phase is whether or not the government need to part nationalise one of the smaller banks. This would see the government buy shares in a bank (possibly from the national pension reserve). Of course, the intention of this would be that the government (and thus, the taxpayer) would benefit in the long term when/if the bank returns to profitability and is worth far more than it currently is.

Basically, from the guarantee alone, the taxpayer is earning a billion euro. Not bad!

redroar1942

Sorry to be pedantic, but what exactly did BOI pay 125million for?

Was for just notion of a guarantee that could never be paid.

I know its intro restored public confidence which is a huge + .

dotsman

redroar1942 wrote: »

Sorry to be pedantic, but what exactly did BOI pay 125million for?

Was for just notion of a guarantee that could never be paid.

I know its intro restored public confidence which is a huge + .

Pretty much. The guarantee is just like any insurance. You pay the cost of the insurance even though you never actually intend actually using the insurance. It's worth it to them so they can boorow on the international markets and not have a run on them while they are at their weakest.

redroar1942

dotsman wrote: »

Pretty much. The guarantee is just like any insurance. You pay the cost of the insurance even though you never actually intend actually using the insurance. It's worth it to them so they can boorow on the international markets and not have a run on them while they are at their weakest.

Except that if i crash my car Quinn will cough up for it. My question is who will cover the bank if they need it?

dotsman

That's the million dollar billion euro question!

Ultimately, it is likely to be as I said, that the government would buy a stake in the bank and then sell it on when the situation has calmed down.

redroar1942

Thanks for your replies dots, sorry to keep hounding you about it.