Bank Of Ireland Share Discussion Threads

[cricklewood] 09/3/2014 14:12

Shane Ross – Published 09 March 2014 02:30 AM

Wilbur Ross is no longer a hero of the Irish nation. Three years ago the US billionaire did Michael Noonan a big favour. He relieved the Minister for Finance of a burden. A bundle of Bank of Ireland shares changed hands at 10c each. Noonan saved over a billion euro.


Ross, Fairfax Finance and a few other bottom-fishers had bought a pile of junk. Or so it seemed. Michael Noonan, the schoolteacher from Limerick, had wiped the eye of one of the US's most ruthless vulture capitalists.

Richie Boucher, the Bank of Ireland boss, was delighted. Unlike AIB, his bank would now remain out of majority State ownership. Noonan would still hold 14 per cent, but not enough to kick Boucher around. Boucher was far more comfortable in the clutches of a vulture from the US than a social democrat from Europe.

Ever since Ross took his stake – and place on the board – Boucher and Ross have expressed public admiration for each other.

Boucher and Ross have prospered. Boucher has somehow survived, bolstered by the support of Ross and his co-investors. They share a philosophy. Ross is one of the few people who is not shell-shocked by Boucher's pay package, endorsing it at every AGM.

Boucher's and Ross's fortunes were locked together. Until last week, when Wilbur Ross began to cash in his chips. After a supposedly good set of results from Bank of Ireland, its chief supporter began to exit. Ross perversely painted the sale as a vote of confidence.

On Friday, before the results, the shares had closed at 39c.

On Monday, following the superficially fine figures,the shares began to suffer their worst week for nearly two years, finishing down 6c at 31c, a fall of over 20 per cent.

Ireland's congenitally bullish brokers muttered the usual excuses: some pleaded that world markets were down on the Ukraine crisis; another told me that the market in BoI shares was "constipated"; another that there were rumours of "one big seller".

The rumours were on the money. There was "one big seller" in the market. His name was Wilbur Ross. The other rumour, that he was fiercely constipated, was no exaggeration. On Tuesday the canny American sold a third of his holding at 32.8c.

The price looked weak on the day, but to BoI's constipated shareholder, it was a laxative. One of the most opportunistic investors to hit Ireland for many years was sailing back across the Atlantic, having trebled his money in just three years. He and his co-adventurers had unloaded only one-third of their holding, but that sale alone had recouped their entire original stake. Every dollar now riding in the market is pure profit.

[kulvinder] 07/3/2014 19:18

Yes Cruiser, but will it stop at 30 cents, or will it drop further, that is the million euro question? Will it break against the chart trend in the last 2 years, as it has not dropped back further then about 8 cents each time it has retraced from it's peak price at any moment in time.

[cruiser70] 07/3/2014 16:47

Technical retrace to retest previous resistance at 30 cent, if any of you can see beyond your nose that's a good thing.. too far too soon

[moneybags] 07/3/2014 15:38

LBO......A buyer....!!


Moneybags falls over and faints at this point.

Realising Moneybags was right,all along............

It's a buy



Regards , MoneyNowI'mForItBags

[lbo] 06/3/2014 21:28

Which Irish broker is that from!!!??? You would wonder why Ross would sell any shares if things are so bullish going forward?http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=BIR:ISEThe 11 analysts offering 12 month price targets for Bank of Ireland have a median target of 0.30, with a high estimate of 0.40 and a low estimate of 0.15. The median estimate represents a -8.54% decrease from the last price of 0.328.

[kemorkid] 06/3/2014 17:03

Bank of Ireland – FY13 results – Good margin momentum, PT up to 45c
Buy – Price Target - €0.45 (from €0.40)

FY13 in line at pre-provision level, but better momentum on margin
BOI reported a FY13 net loss of €490m vs our €870m expectation. Pre-provision profit at €1,065m was only marginally better than anticipated, but lower provisions (helped by declines in defaulted loans in H2 and rising collateral values) accounted for the bulk of the beat. The FY13 1.84% margin implies a 2.03% H213 run-rate, providing upside to our pre-results FY14 forecast of 2.02%. Whilst a large part of the liability pricing has played out, there is still enough momentum on both sides of the balance sheet to upgrade FY14 by 11bps to 2.13%. The focus for margin upside further out now shifts to asset growth. Our models have a flat balance sheet to 2015, but opportunities to grow exist as other players exit Ireland. Any volume uptick would underpin the next leg of the upgrade story.

Improving profitability to support capital formation
Transitional rules core tier 1 was 12.3%, with the fully loaded ratio at 9.0% (6.3% ex the preference shares). BOI is profitable and now accreting capital which should ease concerns on a fully loaded basis. Transition rules capital trends between 13-15% out to 2017, providing good protection for the cocos (8.25% trigger) and the preference shares. We like both, but have a relative preference for the latter given their structural seniority and c.40bps yield pick-up (if assume a July 16 call).

Earnings upgrade cycle continues, pushing PT to 45c
The better margin adds materially to earnings over our forecast horizon. Our base valuation year of 2017, when ROE reaches our 15% sustainable level, is upgraded by 13%. Cumulative NAV by then is 10% higher. Our PT moves from 40c to 45c.

[cruiser70] 06/3/2014 13:35

LBO, good to see you converse after all these years here and I remember you going long way back. Good luck to you

[lbo] 06/3/2014 09:40

No was a buyer much lower down

[kemorkid] 06/3/2014 09:09

You buying on the sly LBO?

[lbo] 05/3/2014 20:56

Would they have been able to sell it all? The share price fell with them only part selling so what would it have done if they tried to offload it all?

[kemorkid] 05/3/2014 17:45

Why wouldn't they have sold it all then LBO?

[lbo] 05/3/2014 17:35

Kemorkid its what was said the other day in this article before the results and seems to be still an issue post results. Is Wilbur/Fairfax too now expecting another rights issue and thus the sale of some of its stake?

[boldtrader] 05/3/2014 13:57

Lets hope so !!

[leebong] 05/3/2014 12:42

Looks like the share price has bottomed out and is consolidating.

[kemorkid] 05/3/2014 11:57

Thats a bit worrying LBO

[lbo] 05/3/2014 11:28

Bank of Ireland is now trading at two times' book value



In a research note issued yesterday, the French investment bank, Societe Generale, put a 12 month target price of 22c on Bank of Ireland, which is 43.6% discount on the closing price when the research note was written.

The two analysts who compiled the note questioned the bank's level of bad debt provisioning.

"Bank of Ireland's recovery continues, with the net interest margin in particular looking impressive. But we are held back by the low capital ratios (just 6.3% fully-loaded Basel 3 core tier 1 ratio excluding the preference shares that will be derecognised for capital in 2016) and the valuation: this stands at 1.6x end-2014 tangible book value."

"Bank of Ireland took a top-up provision against certain bad assets in the second half of the year after discussions with the Central Bank of Ireland.

"It appears as though the matter is settled, with no further regulatory-driven top-ups likely. But we note that its provision coverage of non-performing loans on UK and Irish commercial real estate is lower than most other banks, relative to the quality of the portfolio."

[benchmark] 05/3/2014 11:15

Again - a glance will show repeated BUYs this morning of 250,000 lots and occasional 500,000. Substantial deals. At this stage no one knows whether or not these are coming out of the disposal in train of WR's tranche through Deutsche Bank

[benchmark] 05/3/2014 10:49

Nice to see that the vast majority of SELLs this morning are less than 50,000 lots whereas there are numerous BUYs well in excess of 100,000 shares and way greater than that. In other words, the smaller fry are running and those with deeper pockets and a longer view are buying in.

[kemorkid] 05/3/2014 10:47

"The sale represents more than a third of Ross and Fairfax's stakes in the bank. The disposal today raised about 681 million euros, more than the two investors paid for their entire stake."

So they are happy with their other two thirds -sounds good to me.

[scottishfield] 05/3/2014 10:35

Lol, way to go yet imo Lukee2. Chart still intact, at a good buy point, so I got a few more.

[lukee2] 05/3/2014 09:44

the stability alone this morning is enough to bring a tear to my eye! What a roller coaster few days.

[deb81e] 04/3/2014 21:15

Billionaire Ross Triples Money in Bank of Ireland Share Sale

Wilbur Ross, the U.S. billionaire investor in struggling industries, sold part of his stake in Bank of Ireland Plc, more than tripling his money with his bet on the lender. The bank's shares tumbled.

Deutsche Bank AG and Davy, Ireland's largest securities firm, placed about 2 billion Bank of Ireland shares today on behalf of Ross and Fairfax Financial Holdings (FFH) Ltd. The shares, equating to a 6.4 percent stake in the largest Irish lender, were sold at 32.8 euro cents each, Deutsche Bank said in a statement. The investors paid 10 cents for the shares in 2011.

"We had not been shopping the block and have no present plans to sell any more of our holding," Ross, 76, said in an e-mailed response to questions, adding that he decided to sell some shares following an approach from Deutsche Bank. "We remain totally confident in management."

Ross's WL Ross & Co., Fairfax and three other investors paid 1.1 billion euros ($1.5 billion) for a 34.9 percent stake in Bank of Ireland. (BKIR) The accord helped the Dublin-based bank avoid state control as its bad loans soared in the wake of a real-estate collapse. The lender said yesterday it is trading profitably for the first time since 2008, as soured loans started to decline.

"Given the appreciation in the bank's share price and its current premium valuation, we are not surprised to see some of the original North American anchor investors move to take some cash off the table," said Ciaran Callaghan, an analyst at Dublin-based Merrion Capital. "In some sense, they have done their job and made their return."

Shares Drop

Bank of Ireland fell as much as 12 percent, the biggest decline since May 16 2012, and traded at 32.4 cents as of 4:30 p.m. in Dublin. The shares have advanced about 138 percent in the past year, giving the lender a market value of 10.5 billion euros.

The sale represents more than a third of Ross and Fairfax's stakes in the bank. The disposal today raised about 681 million euros, more than the two investors paid for their entire stake.

The 2011 group, which also included Fidelity Investments, Kennedy-Wilson Holdings Inc. and the Capital Group, helped the lender avoid nationalization, as a raft of its rivals fell under government ownership.

Ross sought out troubled banks as the financial crisis hit in 2008. His firm was one of four private-equity groups that paid $900 million for the failed BankUnited Inc., purchasing it from the Federal Deposit Insurance Corp. in May 2009.

While WL Ross and Fairfax each acquired 9.3 percent of Bank of Ireland, their stake fell when the lender sold 580 million euros of shares in December to partly refinance the state's 4.8 billion-euro bailout of the lender since 2009.

Too Big

The position was "too big and too concentrated for us now," said Paul Rivett, president of Fairfax, in an e-mail. The firm plans to hold its remaining shares for the "long term," he said.

Chief Executive Officer Richie Boucher, in the job five years, has shrunk the bank's balance sheet, returned 6 billion euros to taxpayers and cut about 2,000 jobs since the five investors took a stake in the bank.

Signs are emerging that the Irish economy is on the mend. Home loan arrears of more than 90 days fell in the fourth quarter for the first time since the central bank started the series in 2009, it said today. Consumer confidence rose to an almost seven-year high last month, according to KBC Bank Ireland Plc and the Economic & Social Research Institute.

Finance Minister Michael Noonan has also signaled he plans to sell taxpayers' remaining 14 percent stake in the bank in time. He said in an interview with Bloomberg Television in January that he is "under no pressure" to do so.

Pat Farrell, a spokesman for the bank, declined to comment on any sale of shares.

"While possible supply may temper share price performance, we are still fans of the Bank of Ireland story over the medium term and would regard any technical weakness as an opportunity," said Eamonn Hughes, an analyst at Dublin-based Goodbody Stockbrokers, who rates the stock a buy.

[cricklewood] 04/3/2014 20:02

Seeking Alpha
To Me



Today at 6:08 PM





Ross and Fairfax partly unload Bank of Ireland stakes • 1:07 PM
•Wilbur Ross and Fairfax Financial (FRFHF) paid about €0.10 per share when they acquired about an 18% stake in Bank of Ireland (IRE -6.6%) in 2011 to help prevent the lender's nationalization. Not unexpected given strong demand for the stock, today's sale whittles their holdings down to about 12%. The two have more than tripled their money with the investment.
•The Irish government continues to hold a 14% stake in the bank and there will no doubt be heightened interest in an offering of these shares.