Profit from some Banks and Nama

Someday

I was reading at the weekend that Nama should show a profit of €1 Billion and with AIB showing a half year profit of €1.2 Billion, that puts a value on them at €24 Billion(10 times Profit).

So if we sell or float AIB and let’s say we get €22 Billion, take €20 Billion off what we borrowed to bail them out. That leaves us a saving on repayments of about 1 billion and 2 Billion over?

1 Billion from Nama will probably be 1.5 billion with a low ball from the government.

I believe also the government could get extra from PTSB and BOI when fully sold off! (Let’s say 500 mil)

€5 Billion in total, if spend wisely it could save a lot of issues for the new government.

Income tax reduction (Crazy income tax system)
Justice ( Too many break-ins)
Transport (m45 built and other roads)
HSE & ED departments
Housing
Other

ressem

The shareholding's held by the Strategic Investment Fund (formerly the pension reserve fund).
The last Ernst and Young valuations were a lot lower, at the start of the year.
http://www.irishtimes.com/business/financial-services/state-s-holding-in-aib-increases-by-1-7bn-in-value-1.2059497

So it shouldn't be raided for day to day expenditure, absolutely not for income tax cuts (one-off windfall income won't offset a cut in annual income).

We've €51 billion of debt to roll over between 2018 and 2020. It'd be comforting to have some reserve to avoid being crunched by lenders at that stage.
If interest on debt can be minimised, then that saving can be used for annual budgeting.
Just as the €7 billion of reserves used last year cut our IMF interest costs.

BoJack Horseman

I think you are overstating the potential value of a re-privatised AIB.

Also, as things stand, NAMA wont make a profit..... a small loss is the most likely outcome.

Overall, the financial crisis wont see a profit for the state.
And if it did, lowering our already low income tax rates would be the worst place to spend it.

Someday

@ressem that value is based on last year’s profits, they are working off 10 times! Their profit has doubled this year.

@BoJack Horseman people getting 48c in the euro after 33K is not good, no incentive to move up the ladder.

BoJack Horseman

Someday wrote: »

@BoJack Horseman people getting 48c in the euro after 33K is not good, no incentive to move up the ladder.

Then lower the trehshold at the lower end and raise it at the upper end.

However under no circumstances should the berti-nomics of collapsing income tax in lieu of transient consumption taxes be the order of the day

ressem

According to
http://group.aib.ie/content/dam/aib/group/Docs/Press%20Releases/2015/aib-announces-2015-half-yearly-financial-results.pdf

the pre-provision profit for the half year 2015 is €701 million, not €1.2 billion.

And the bank's stock market valuation should be around 1.6x the net asset value of the group, to be in line with other European banks (and that seems a bit frothy).
There are still impaired loans of €18 billion.

Not simply 10x profit, which is too volatile, what with all the write-backs and one-offs of a recovering bank.

Someday

@ressem - Fair enough but I think we can get our 20 billion back, which will make savings on repayments. That could be over 1 Billion a year! From Nama, that could be 1 Billion and would go along way to help many areas!

@BoJack Horseman, what tax changes would you make, if you had the above to play with?

BoJack Horseman

Someday wrote: »

@BoJack Horseman, what tax changes would you make, if you had the above to play with?

None.....

and its all moot anyway cos your figures are pie in the sky.

However....public expenditure is very very low.
€9bn per year less than it was at peak.
The governments capital budget is around half what was widely regarded as the minimum needed to get by, let alone improve.

If I had piles of imagination money, I would invest it in public services & infrastructure.

The amount of tax the government extracts from the economy is still low by peer nation standards (36%) and far far less than the mythical Nordics everyone says we should copy.

Someday

So you would take more tax out, where would you target?

BoJack Horseman

Someday wrote: »

So you would take more tax out, where would you target?

No, I'm just talking about the imaginary billions you say the financial sector crisis will yield us.

Once the current increase in revenue isnt wanked away on tax cuts, public expenditure will increase anyway.

Someday

Nama - http://www.irishtimes.com/business/economy/nama-set-for-potential-surplus-of-1bn-when-it-winds-down-1.2227596

AIB - http://www.irishexaminer.com/business/aib-and-noonan-focus-on-value-to-taxpayer-347103.html

BoJack Horseman

Someday wrote: »

Nama - http://www.irishtimes.com/business/economy/nama-set-for-potential-surplus-of-1bn-when-it-winds-down-1.2227596

AIB - http://www.irishexaminer.com/business/aib-and-noonan-focus-on-value-to-taxpayer-347103.html

Neither say anything concrete about profits.

Lots of "hope" & "maybe" etc......
fluff articles of hypothetical

.

Someday

Well, lets wait and see and hopefully we will have a good outcome!

realitykeeper

Someday wrote: »

€5 Billion in total, if spend wisely it could save a lot of issues for the new government.

Income tax reduction (Crazy income tax system)
Justice ( Too many break-ins)
Transport (m45 built and other roads)
HSE & ED departments
Housing
Other

The net cost of bailing out the banks will be upwards of 100 billion if the Irish people are stupid enough to go along with it. Banking on the stupidity of the people will certainly work for the government in the short term at least.

That said, the next recession will have people scrambling for people and circumstances to blame. That is when the issue of the bank bailouts will come back into focus. The contrast between Ireland`s floundering economy and Iceland`s robust economy will then become glaringly obvious.

The question then will be what to do about it. It would be pointless offering a view on that at this juncture because so many people think the bank bailouts were a necessary evil and that the government has turned the economy around. Only the next recession will determine who was right.

BoJack Horseman

realitykeeper wrote: »

The net cost of bailing out the banks will be upwards of 100 billion

Show your sums for the rest of the class....

The contrast between Ireland`s floundering economy and Iceland`s robust economy will then become glaringly obvious.

cant win em all I guess

KingBrian2

realitykeeper wrote: »

The net cost of bailing out the banks will be upwards of 100 billion if the Irish people are stupid enough to go along with it. Banking on the stupidity of the people will certainly work for the government in the short term at least.

That said, the next recession will have people scrambling for people and circumstances to blame. That is when the issue of the bank bailouts will come back into focus. The contrast between Ireland`s floundering economy and Iceland`s robust economy will then become glaringly obvious.

The question then will be what to do about it. It would be pointless offering a view on that at this juncture because so many people think the bank bailouts were a necessary evil and that the government has turned the economy around. Only the next recession will determine who was right.

Wouldn't the current figure prove that the worst of the financial crisis are over. The commitment of politicians to keep the deficit down is the real issue. If say a Sinn Fein government got into power would they have cost effective budget to implement or would it be back to the gravy train.

Someday

If Sinn fein get in we are in serious trouble!

realitykeeper

Seems like some folks here can`t tell the difference between the present and the future. The next recession is not here yet. This is the present, the next recession will be in the future. It would be funny if it hits in 2018, just before Enda Kenny plans to step down as Taoiseach.

creedp

realitykeeper wrote: »

Seems like some folks here can`t tell the difference between the present and the future. The next recession is not here yet. This is the present, the next recession will be in the future. It would be funny if it hits in 2018, just before Enda Kenny plans to step down as Taoiseach.

I wouldn't worry about that becasue 'm sure Kenny would do a 'Bertie' on it

KingBrian2

creedp wrote: »

I wouldn't worry about that becasue 'm sure Kenny would do a 'Bertie' on it

Do you mean keep voting him in and it will be sorted. Regardless of who is the next Taoiseach the next gvt needs to have a competent Dail to co decide legislation with the cabinet and a major priority is to reduce the national deficit. Forget the recession the deficit is too damn high.

realitykeeper

KingBrian2 wrote: »

Regardless of who is the next Taoiseach the next gvt needs to have a competent Dail to co decide legislation with the cabinet and a major priority is to reduce the national deficit. Forget the recession the deficit is too damn high.

Even if the deficit were reduced to zero immediately, the existing debt is far too high. Ireland will go into the next recession with that high debt. It is the combination of high debt and recession that will create insurmountable problems in the future. Ireland must get rid of its debt and tell creditors who gave money to bail out the banks to get their money from the banks. NAMA should be disbanded and whatever profit it made should be given back to the banks.

KingBrian2

realitykeeper wrote: »

Even if the deficit were reduced to zero immediately, the existing debt is far too high. Ireland will go into the next recession with that high debt. It is the combination of high debt and recession that will create insurmountable problems in the future. Ireland must get rid of its debt and tell creditors who gave money to bail out the banks to get their money from the banks. NAMA should be disbanded and whatever profit it made should be given back to the banks.

At least we agree that the deficit is too high. As for the debt it is in line with European norms so no volatility on the markets. Borrowing to much will make the international picture a lot worse. The economy can only get better with domestic growth.

realitykeeper

KingBrian2 wrote: »

At least we agree that the deficit is too high. As for the debt it is in line with European norms so no volatility on the markets. Borrowing to much will make the international picture a lot worse. The economy can only get better with domestic growth.

The deficit is a minor issue. The big problem is the existing debt which is extremely high. Domestic growth will not solve the problem. Growth from exports may help but it will be nowhere near enough to create the income necessary to significantly reduce the national debt before the next recession.

In fact, the government is not even talking about reducing the debt. It is still going on about reducing the deficit. Attempting to deflate the debts of the PIGS will backfire spectacularly in the form of hyperinflation.

creedp

KingBrian2 wrote: »

Do you mean keep voting him in and it will be sorted. Regardless of who is the next Taoiseach the next gvt needs to have a competent Dail to co decide legislation with the cabinet and a major priority is to reduce the national deficit. Forget the recession the deficit is too damn high.

No I mean that Kenny craves popularity - typical Irish person maybe.. just wants to be loved - so he will do a runner before the crap really hits the fan just like the lovable Bertie did to Cowen.

KingBrian2

realitykeeper wrote: »

The deficit is a minor issue. The big problem is the existing debt which is extremely high. Domestic growth will not solve the problem. Growth from exports may help but it will be nowhere near enough to create the income necessary to significantly reduce the national debt before the next recession.

In fact, the government is not even talking about reducing the debt. It is still going on about reducing the deficit. Attempting to deflate the debts of the PIGS will backfire spectacularly in the form of hyperinflation.

Borrowing to increase demand is not the answer that's for sure. I know the economy needs to be allowed to compete in a fair way with other trading nations. The decision by the Russians to build barriers with Europe is unhelpful at this time. Everyone knows the Russians are harming their own economy by prohibiting the EU from making more deals with its neighbour Ukraine.

realitykeeper

KingBrian2 wrote: »

The decision by the Russians to build barriers with Europe is unhelpful at this time. Everyone knows the Russians are harming their own economy by prohibiting the EU from making more deals with its neighbour Ukraine.

Even President Putin would agree with this. Russians are building barriers to counteract the expansionist policies of NATO and the unwillingness of the EU to allow Ukraine develop trade relations with Russia without sanctioning the Ukraine with exclusion from the EU trading block. Russia also has to respond to western sanctions even if that response hurts Russia at the same time. It is a matter of principle.

KingBrian2

realitykeeper wrote: »

Even President Putin would agree with this. Russians are building barriers to counteract the expansionist policies of NATO and the unwillingness of the EU to allow Ukraine develop trade relations with Russia without sanctioning the Ukraine with exclusion from the EU trading block. Russia also has to respond to western sanctions even if that response hurts Russia at the same time. It is a matter of principle.

I realise that though we are not Russia's enemy, lower tariffs and restart trade with all the Black Sea ports is the best possible solution. Putin has made his intentions clear when it comes to safeguarding Crimea. He has to be made to see that our trade is benevolent of those countries presently situated around the Black Sea, Ukraine, Turkey & Georgia we have every right to enter these markets and establish bilateral trade with all these countries.

realitykeeper

BoJack Horseman wrote: »

Show your sums for the rest of the class....







cant win em all I guess

From 2008 to 2015, Ireland`s national debt grew by well over 100 billion euro. In Iceland, every mortgage in the country was forgiven 100% so domestic debt was reduced to nothing.

Ireland`s growth is fueled by debt which must be paid back with interest. I guess you are right, can`t win em all.

andrew

realitykeeper wrote: »

In Iceland, every mortgage in the country was forgiven 100% so domestic debt was reduced to nothing.

No they weren't

Irelands growth is fueled by debt which must be paid back with interest. I guess you are right, cant win em all.

Proof that it's being fuelled by debt? And if it is, proof/argument for why that's a bad thing? It's entirely possible to have debt fuelled growth so long as you're using that debt for productive investments and not consumption.

BoJack Horseman

realitykeeper wrote: »

In Iceland, every mortgage in the country was forgiven 100% so domestic debt was reduced to nothing.

It's amusing how all of your posts are wrong, all the time

Is it a trolling thing?

realitykeeper

BoJack Horseman wrote: »

It's amusing how all of your posts are wrong, all the time

Is it a trolling thing?

No it`s the truth. https://www.youtube.com/watch?v=uyxzg58JkYI

But why was it even necessary to post this video clip. Surely if the banks say savers are not going to get their money back, the state would retaliate by telling the courts not to process any claims by the banks. In other words, state imposed mortgage forgiveness.