To Aib or not to Aib

blahboy

Hi folks,

Does anyone have any thoughts about the AIB IPO.

10k seems like a lot to blow on a pig in the poke.

Anyone know what the value of these shares would be?

I am tempted for the reason that in the past they were great dividend payers.

Anyone any thoughts?

Regards

Extra

gordongekko

10k seems like a lot to blow on a pig in the poke.


Did you not just answer your own question??

Atlantic Dawn

Completely different organsation from what was there before in a completely different economic environment with new rules, would be a no from me.

gordongekko

Atlantic Dawn wrote: »

Completely different organsation from what was there before in a completely different economic environment with new rules, would be a no from me.

What??

hurler32

Who is the best option if you did want to buy shares in AIB for someone who doesnt have a share account set up??....before you could walk in a Bank to do this but they dont do it any more??
Just for a friend i know..cough cough..:)

Francie Barrett

This is going to be controversial, but I think AIB could actually be a very good investment opportunity assuming that this IPO isn't going to be overpriced. I have not looked at AIB for a long time, but I did read the most recent annual report and was pleasantly surprised. By and large, the metrics I like to use for bank valuations are very good. Trading at just 1.1x book value with a ROE of 11% and a ROA of 1.4% for the last two years is very good. The cost/income ratio is down, the bad loans are down, capital ratio's are much improved and the leverage ratio is way, way down. The only negative I can see with this is that it's almost entirely exposed to the Irish economy (in some ways, this is actually a good thing as it means they effectively have a monopoly, in others it's bad, as remaining in Ireland will have limited growth prospects). I think if you were to buy some and tuck it away for 5 years, you would do well.

lucky john

A couple of down sides for me anyway.

when the first bit is sold 75% remains in government control. it's not going to be a very liquid share for a long time.

even when sold off there will be billions still to be repaid to the state. Thats bound to have an effect on future performance and the dividends paid out.

If the investment is for the dividends then waiting for at least a second or even third 25% sale down the road a bit might make more sense.

Having said all that if they sell the shares off at a low price that would change the view. At the moment they value the bank at 11 or 12 billion while BoI is worth less than 8 billion.

99nsr125

lucky john wrote: »

A couple of down sides for me anyway.

when the first bit is sold 75% remains in government control. it's not going to be a very liquid share for a long time.

even when sold off there will be billions still to be repaid to the state. Thats bound to have an effect on future performance and the dividends paid out.

If the investment is for the dividends then waiting for at least a second or even third 25% sale down the road a bit might make more sense.

Having said all that if they sell the shares off at a low price that would change the view. At the moment they value the bank at 11 or 12 billion while BoI is worth less than 8 billion.

Ahahahaha

12 Billion
Still a bag of feaces
I'm sure it'll climb 20% in the first day

Market is completely insane
PE's of 30's in the states

Get ready for a crash folks

blahboy

Francie Barrett wrote: »

This is going to be controversial, but I think AIB could actually be a very good investment opportunity assuming that this IPO isn't going to be overpriced. I have not looked at AIB for a long time, but I did read the most recent annual report and was pleasantly surprised. By and large, the metrics I like to use for bank valuations are very good. Trading at just 1.1x book value with a ROE of 11% and a ROA of 1.4% for the last two years is very good. The cost/income ratio is down, the bad loans are down, capital ratio's are much improved and the leverage ratio is way, way down. The only negative I can see with this is that it's almost entirely exposed to the Irish economy (in some ways, this is actually a good thing as it means they effectively have a monopoly, in others it's bad, as remaining in Ireland will have limited growth prospects). I think if you were to buy some and tuck it away for 5 years, you would do well.

Interesting thoughts Francie - I guess it is a bet on the Irish economy. We are talking about a company that has blown up three times in the last 30 years approx. I did not think that they would only be selling 25% approx of the business but I guess that is the case.

hmmmm.....

littlevillage

Giving this thread a bump because of IPO announcement this evening.

What are peoples thoughts? Is it worth a punt? . minimum investment is €10,000..... and you have to open an account with one of the 6 appointed brokers.

Don't see DeGiro there, so I wonder does this mean that the brokers will charge a large commission for the service? that might take some of the gloss off any potential upside in the share price IPO?

Also would it be best to offload these shares immediately once there is any profit to be made or hang on to them a while and see how it goes?

listermint

littlevillage wrote: »

Giving this thread a bump because of IPO announcement this evening.

What are peoples thoughts? Is it worth a punt? . minimum investment is €10,000..... and you have to open an account with one of the 6 appointed brokers.

Don't see DeGiro there, so I wonder does this mean that the brokers will charge a large commission for the service? that might take some of the gloss off any potential upside in the share price IPO?

Also would it be best to offload these shares immediately once there is any profit to be made or hang on to them a while and see how it goes?

Brexit.

How are bank shares going in general.

Heisenberg.

This post has been deleted.

Mc-BigE

I take it these shares will be for sale on the open market following the flotation?
Then go to any online trader and buy say 1000 euros worth of shares? instead of the 10000 their looking for now?
or does it not work that way?

hinault

I suggest for read 2016 EBA Stress test results before deciding to invest

https://www.eba.europa.eu/documents/10180/1532819/2016-EU-wide-stress-test-Results.pdf

Francie Barrett

It's starting to sound like the government are going to get a good price for the shares (ie they'll be expensive!). I would wait and see what the terms are for this IPO, price will be key, as well as any allotment of free shares.

Francie Barrett

Mc-BigE wrote: »

I take it these shares will be for sale on the open market following the flotation?
Then go to any online trader and buy say 1000 euros worth of shares? instead of the 10000 their looking for now?
or does it not work that way?

Yes, you will be able to buy them on the day of flotation.

Francie Barrett

hinault wrote: »

I suggest for read 2016 EBA Stress test results before deciding to invest

https://www.eba.europa.eu/documents/10180/1532819/2016-EU-wide-stress-test-Results.pdf

That stress test was done against data that is now over 18 months old.

In particular, no capital measures taken after the reference date 31 December 2015 were to be assumed.

Like I said, the leverage ratio's are way down (currently 9.2% from 7.9%) even between now and end of 2015. Fully loaded CET1 is now well above Basle 3 minimum requirements and the impaired loan book is down a further 30%.

If a stress test was done today, AIB would be passing comfortably.

hinault

Francie Barrett wrote: »

That stress test was done against data that is now over 18 months old.

Like I said, the leverage ratio's are way down (currently 9.2% from 7.9%) even between now and end of 2015. Fully loaded CET1 is now well above Basle 3 minimum requirements and the impaired loan book is down a further 30%.

If a stress test was done today, AIB would be passing comfortably.

Personally I'd place far more reliance upon what the EBA say about AIB, than what banks/bank auditors/Irish regulator/Irish politicians say about the wellbeing of AIB.

Francie Barrett

hinault wrote: »

Personally I'd place far more reliance upon what the EBA say about AIB, than what banks/bank auditors/Irish regulator/Irish politicians say about the wellbeing of AIB.

This has nothing to do with Irish politicians or the regulator.

The EBA stress test was based on 2015 financials (that the banks themselves provide). This data is now completely out of date. Indeed, if you look at the EBA's baseline estimate of where AIB would be in in 2018, AIB have actually posted numbers that are better than what the EBA estimated, one year earlier than what the EBA expected! If you're suggesting that the numbers themselves are jimmied - that is not the case. All the numbers that the EBA use, and that AIB report on (and indeed all European banks) are based on the Basle 3 regulatory framework. Bank capital and assets just cannot be made up.

hinault

Francie Barrett wrote: »

This has nothing to do with Irish politicians or the regulator.

EBA report is the latest report as to the stability of Allied Irish Bank and to it's inability to withstand a major shock.

The EBA report is clear, AIB does not met the minimum threshold standard.

In the meantime we have AIB itself/AIB auditors/Irish politicians touting AIB's financial wellbeing.

If you prefer to trust the assurances of AIB itself/AIB auditors/Irish politicians, rather than trusting the latest independent stress test results, please be my guest.

Mc-BigE

Francie Barrett wrote: »

It's starting to sound like the government are going to get a good price for the shares (ie they'll be expensive!). I would wait and see what the terms are for this IPO, price will be key, as well as any allotment of free shares.

what free shares? i thought it said on the AIB website that there wouldn't be bonus shares

Francie Barrett

hinault wrote: »

The EBA report is clear, AIB does not met the minimum threshold standard.

It's based on data that is now 18 months out of date.

hinault wrote: »

In the meantime we have AIB itself/AIB auditors/Irish politicians touting AIB's financial wellbeing.

Naturally, they want to get the best price.

hinault wrote: »

If you prefer to trust the assurances of AIB itself/AIB auditors/Irish politicians, rather than trusting the latest independent stress test results, please be my guest.

This has nothing to do with promises or assurances of anyone. AIB demonstrably is a much stronger bank in 2017 than it was in 2015 using the criteria that have been set down in Basle 3.

Francie Barrett

Mc-BigE wrote: »

what free shares? i thought it said on the AIB website that there wouldn't be bonus shares

Free shares, discounted shares, we have no idea what is being offered yet. Price is the key determinant as to whether this IPO is attractive or not.

hinault

Francie Barrett wrote: »

AIB demonstrably is a much stronger bank in 2017 than it was in 2015 using the criteria that have been set down in Basle 3.

Not according to the latest European Bank Authority report.

If the European Bank Authority report due June 2017 states that AIB's perilous
capital position has improved, so be it.

Francie Barrett

hinault wrote: »

Not according to the latest European Bank Authority report.

If the European Bank Authority report due June 2017 states that AIB's perilous
capital position has improved, so be it.

It's self evident that AIB is in much better shape (see the figures I quoted).

Cute Hoor

Francie Barrett wrote: »

Free shares, discounted shares, we have no idea what is being offered yet. Price is the key determinant as to whether this IPO is attractive or not.

My understanding is that there will be no free, discounted or loyalty shares this time around, everybody pays the same price.

Mc-BigE

AIB prospectus link here, a little bit of light reading for you

this is gobbledygook to me, but the risk section caught my eye!

https://aib.ie/content/dam/aib/investorrelations/docs/protected/AIB-Prospectus-final-12062017.pdf

so a share price of 3.90 to 4.90 a share

shares closed at 6.50 last night and are falling as a type.

im not sure if i want to put 10K of my hard earned money on a gamble,

but i will be kicking myself if the share price rises back to 6.50 after flotation day.

Nody

Mc-BigE wrote: »

AIB prospectus link here, a little bit of light reading for you

this is gobbledygook to me, but the risk section caught my eye!

https://aib.ie/content/dam/aib/investorrelations/docs/protected/AIB-Prospectus-final-12062017.pdf

so a share price of 3.90 to 4.90 a share

shares closed at 6.50 last night and are falling as a type.

im not sure if i want to put 10K of my hard earned money on a gamble,

but i will be kicking myself if the share price rises back to 6.50 after flotation day.

Then I can save you a kicking as they are highly unlikely to do so; the shares are dropping because it's such a small volume available now vs. what will be put up. This means the weighted average will be far close to the 3.90 - 4.90 range than the 6.50 range short of a very significant uptake of interest (talking subscription rate in the 300% of available kind of numbers on UK's largest 2017 IPO; i.e. highly unlikely). The second dampener is the fact the Irish state still owns 75% which will be sold eventually which will work as a wet blanket over the share prices as well (state owned companies have a tendency to focus on the state owners interest over the market's interest and are more at risk to become politically driven into decisions rather than sound business decisions driving decisions).

The Cuban

The floatation price is just too high in the current market plus I dont trust AIBs figures, they unlike BOI have had several write backs to beef up the books for this IPO. No if you want to invest in Irish Banking (which may prove very lucrative in the future) its better to stick with BOI for the moment.

dxhound2005

I am seeing some people on the internet taking the opportunity presented by the AIB flotation to push BOI as an alternative investment.

I do not trust BOI's figures and I suspect that some of these people are holders of BOI stock and have a vested interest in promoting them ahead of AIB shares.

littlevillage

Just can't come to a decision about whether or not to take the plunge on AIB.


On the positive side

- The Share sale price €3.90 - €4.90 looks to be well below the current (albeit tiny amount of shares that were in circulation) €6 share price, which could mean a quick killing for investors if the new shares go back up to that €6 mark, quickly after the IPO.


- One assumes that the large investors who AIB have courted in their roadshows have done their homework here and only agreed to invest in the IPO if there is virtually a guaranteed upside built into the share price they pay, this then should mean its a no-brainer for regular plebs like us to row in behind them and 'fill our boots'

- the other big Irish IPO's were profitable for those who got in at the start and took a profit soon after IPO. example : Eircom was great for those who bought shares and then sold again in the weeks after the IPO (I was one :-) )



but there are several things weighing in on the negative side.

- Irish Government will still retain over 70% of the company shares and will always be seen as meddling in the running of the bank and will that share overhang, depress the share price going forward ?
- AIB still has lots of bad debts
- AIB is very focused on the Irish economy and the Irish Economy is far from immune to trouble like Brexit, moves by Trump to get US companies to pay more tax at home, shocks such as further housing bubble, PCP Auto finance bubble, a major terrorist attack or unrest in the North
- Look at BOI and PTSB, the share price performance has been poor lately, why would AIB be any different?


What to do ???

Mc-BigE

I've decided against it personally ( although there is the gambler in me that wants to do it)

i saved up over 10K in KBC saver account over the last 2 years, i have the money, but i saved it to take some money off my mortgage and in turn reduce my monthly
repayments and overall interest on the mortgage.

this is guaranteed to happen, but the rise in AIB share price is not.

i will have to wait and see, if i feel the need to buy some AIB shares in the future, then i will buy a 2 or 3 thousand worth, not 10000.

Okon

dxhound2005 wrote: »

I do not trust BOI's figures and I suspect that some of these people are holders of BOI stock and have a vested interest in promoting them ahead of AIB shares.

FWIW, when I had a sum of cash to invest around a year ago, I asked a Financial Advisor about BOI shares (as they were around .18c -.20c) and he said stay away from European banks, especially BOI. Some people here seem to think BOI is a good investment so I hope it works out for them, but I haven't put any money in to banking shares and I will stay away from the AIB flotation too.

otterj

How can AIB afford to pay out a dividend with so much bad debts?

Cute Hoor

There is a very significant difference between the bottom and top of the price range for the flotation, €3.90 to €4.90. I presume it will be the Department of Finance who will ultimately decide the float price, based on orders and subscription. Can anybody confirm this.

littlevillage

Cute Hoor wrote: »

There is a very significant difference between the bottom and top of the price range for the flotation, €3.90 to €4.90. I presume it will be the Department of Finance who will ultimately decide the float price, based on orders and subscription. Can anybody confirm this.

Yep, thats my understanding of it. The final price will be decided on Friday 23rd when they actually go on sale and it'll be in between those two range limits

JeffKenna

I don't understand why the AIB share price is still at €6 euro this morning...surely it should be down towards €3.90 - €4.90?

wordofwarning

JeffKenna wrote: »

I don't understand why the AIB share price is still at €6 euro this morning...surely it should be down towards €3.90 - €4.90?

That is the point Noonan almost stated. That the thinly traded shares were irrationally priced. AIB was one of the most valuable banks in the world at one stage, based on the share prices on the stock exchange.

Like I doubt you can even short the 0.2% of shares as they are so thinly traded.

cute geoge

When is the cut off date for purchase of these aib shares I have brokers a/c but no cash in it

duffysfarm

for davys its today

cute geoge wrote: »

When is the cut off date for purchase of these aib shares I have brokers a/c but no cash in it

Francie Barrett

http://www.independent.ie/business/price-range-for-aibs-initial-public-offering-narrows-due-to-strong-appetite-for-deal-35847990.html

The price range on AIB's initial public offering has narrowed to between €4.20 to €4.60 per share

daveirl

This post has been deleted.

JeffKenna

daveirl wrote: »

This post has been deleted.

When are you hoping to sell? Will it be possible to sell tomorrow or do we have to wait until Tuesday?

Francie Barrett

Retail demand apparently well below expectations.

https://www.irishtimes.com/business/financial-services/demand-for-aib-shares-from-public-well-below-early-speculation-1.3128300

Cute Hoor

daveirl wrote: »

This post has been deleted.

This would not appear to be the situation, if you go by what the Irish Times are reporting.

'Institutional investors, including pension funds and asset managers, can set the maximum price within the range that they would be willing to buy AIB stock. However, smaller investors had to commit to buying shares at the final price of the IPO that will be set by the Government and its advisers.'

Very confusing!

Francie Barrett

daveirl wrote: »

This post has been deleted.

Fair play, 4.72/4.73 bid/ask.

positron

DeGiro is doing this today.

Today only: Invest commission-free in AIB

Today only, DEGIRO clients can invest in AIB stocks commission-free.

This promotion is subject to terms and conditions. For more information please see www.degiro.ie/aib.

spawinte

I checked on DeGiro and there's no activity on either the ISE or LSE listing. Am I missing something?

ionapaul

Sold half my allocation at 4.70 earlier, gonna hold off a day or two before deciding what to do with the remainder. The price seems to be set at the correct point, ensuring a small gain for investors without triggering the 'the bastards are giving away the family silver!' cries.

daveirl

This post has been deleted.

Bass Reeves

Dipped into AIB at the floatation. Bought 11K worth and with the floatation price at 4.4 ended up with 2500 shares. Sold half today at 5.1 and ended up with 6350 nets of costs. I will hold the other 1250 they now have a nett cost of 3.72/share.

Always tought the AIB floatation was a banker after the the way institutions lost out on the Irish Permenant floatation. In general I have always invested in Government floatations. I used to off load completely after getting particially stung on the Eircom float. I had bought 5X4500 pound allotments and sold 3 at over 30% profit. Held the other two lots and would have lost 10-15% on them

Aerlingus was a realy nice touch made 2.5K on a 10K sale by waiting until official opening day. Made two twists on that share after really lucky share for me. Had share in PTSB and took up an allocation losing a bit on them but only in it for about 3K in total but losing over 30% on it.

Will see about future AIB share sell-off and decide if it is worth a twist