Irish Banks Need to Roll over €36.5 billion of debt in the next 2 years.

pocketdooz

For those who are still advocating jumping on the idea of investing in the Irish banks with little to no knowledge of why or what they are doing here is some sobering analysis I did yesterday that should at least open your eyes a bit. Irish banks are essentially cut off from inter-bank funding but have to roll massive amounts of debt in the next few years - over €36.5 billion in the next two years alone and €72.3 billion by the end of 2015.

The debt maturing in the Irish banks over the next five years is nothing short of scary given they are cut off from normal funding sources. Even is the sovereign itself can muddle through the current situation without a massive bailout, it is hard to see how the banks can do it without total reliance on the Irish State / ECB / IMF. Attached is a simple spreadsheet where I try to show what they owe - figures are in €-millions.

Comments welcome.

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whysomoody

How long do you think they will be cut off from normal sources of funding though, if markets return to normality somewhat and large portions of the loans they have begin to perform again, there shouldn't be as much trouble receiving funding in future.

good post though.

pocketdooz

whysomoody wrote: »

How long do you think they will be cut off from normal sources of funding though, if markets return to normality somewhat and large portions of the loans they have begin to perform again, there shouldn't be as much trouble receiving funding in future.

good post though.

"If markets return to normality" and "large portions of the loans begin to perform again".

I wouldnt model either of these things happening this side of 2013. Anyone who thinks we are near any sort of a 'bottom' here is living in fantasy-land.

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OfflerCrocGod

That's €1.5Bil a month. The British banks must raise about €35Bil a month in 2011 which is about twice as much as the Irish ones relative to GDP size.

There are very few people who think the British banking system is about to implode.

I don't know about bottom but house prices are down 44% from peak and the drops are slowing down, we need to see what the current shock will do to the system but if it doesn't increase the rate then I'd say we are close to the bottom. Also rental yields are reaching long term averages. Commercial seems to have bottomed. According to BoI affordability is now below long term average in terms of percentage of income required to pay mortgage.

Also number of houses being build is only enough to cover housing stock obsolesce. Of course emigration should reduce housing stock demand. I would see next summer as being a possible bottom.

whysomoody

pocketdooz wrote: »

"If markets return to normality" and "large portions of the loans begin to perform again".

I wouldnt model either of these things happening this side of 2013. Anyone who thinks we are near any sort of a 'bottom' here is living in fantasy-land.

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Well the government have enough funding from the EU to cover them for the next couple of years, I think we will have turned a major corner by end 2011 and that with optimism people might be happier investing perhaps trying to get in with cheaps vals /pure optimism/