Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (31247)	6/22/2008 11:12:34 PM
From: snookcity	Respond to of 78744

Yeah I own GMW and C-Z both down a little, but i'm just useing them for income. Both are in the dumps but i dont think they will go under.

To: Madharry who wrote (31247)	6/23/2008 10:40:33 PM
From: Asymmetric	Read Replies (1) \| Respond to of 78744

Bought AIB back today at $30.95. Probably dumb move on my part. Like most financials, Allied Irish has been on an absolutely precipitous decline. 139.142.147.19 Trailing PE of 4.6 Forward PE of 5.4 Dividend at $31 is 10% Book Value: 34.90. Latest article from Ireland paper: M&T sell-off would boost AIB position, say analysts June 21, 2008 By Joe Brennan / Irish Independent Allied Irish Banks (AIB) could boost its capital position and prompt the market to re-rate its stock, if it sold off its 24 % stake in its American associate M&T Bank, according to analysts at NCB Stockbrokers. In a 20-page study on AIB, the brokerage said the sale of the M&T holding at current prices would generate €1.35bn. "A sale of its M&T stake at current prices would boost forecast [core tier one capital ratios by 0.5 percentage points] to 6.2pc, while diluting earnings by just 4pc," said NCB analysts John Cantwell and Ciaran Callaghan. Banks' core tier one capital ratios, a key measure of their financial stability, have been a major concern among investors in recent times. A raft of UK lenders, including Royal Bank of Scotland, HBOS and Bradford & Bingley, have had to launch equity fundraisings, as the credit crunch continues erode balance sheets across the sector. Unemployment Irish banks have largely avoided US subprime-induced writedowns. But analysts see them incurring massive bad loan impairment charges over the coming years, amid the declining property market and rising unemployment. NCB expects AIB's loan loss impairment charge to increase from 0.9pc, or €106m, of loans in 2007, to 3.0 pc (€393m) this year and 4.5pc (€693m) in 2009. "However, we believe there is a risk that loan impairment could be higher than expected, should the Irish and UK economies continue to deteriorate or the cost of credit continues to rise," the analysts said. They added: "AIB has indicated its interest in M&T is considered non-core [to the group] and discussed the capital impact of a sale at its results presentation in February 2008." The analysts suggested US market guru Warren Buffett's Berkshire Hathaway investment fund may be interested in the stake, given that it holds a further 6pc of M&T. A sale of the M&T stake for €1.35bn would require AIB to book a loss of about €50m, given that AIB has the holding valued at €1.4bn on its books. However, at the time of AIB's annual results in February, finance director John O'Donnell said the group would be able to write back €900m in goodwill that it deducted at the time it acquired the M&T stake in 2003. This writeback would boost AIB's core tier one equity from 5.7pc to 6.2pc, said NCB. AIB is less likely to dispose its 70pc stake in Polish bank Bank Zachodni WBK, it said, even though its 8pc share of that fast-growing market "would represent an attractive asset to one of the large international banks vying for a position in that market."