Aib

Allied Irish Bank

Irish symbol ALBK
http://www.bloomberg.com/apps/quote?ticker=ALBK:ID

NYSE symbol AIB
http://www.bloomberg.com/apps/quote?ticker=aib:US

Share data

http://www.bloomberg.com/apps/quote?ticker=ALBK:ID

882.755 million shares * 1.365 EUR share price

Market cap 1.205 billion EUR

But most articles are saying that the bank needs to raise over 2 billion EUR in fresh capital.

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Bank of Ireland

Irish symbol BKIR
http://www.bloomberg.com/apps/quote?ticker=BKIR:ID

NYSE symbol IRE
http://www.bloomberg.com/apps/quote?ticker=ire:US

Share data

http://www.bloomberg.com/apps/quote?ticker=BKIR:ID

1.118 billion shares * 1.245 EUR share price

Market cap 1.479 billion EUR

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Unless the government is generous with the price at which it will buy shares, I still see further substantial falls in the share price of both banks, particularly AIB.
 
This looks like an update on previous articles.

Specifically 80% govt stake in AIB (not 70% as previously speculated) and 7.5 billion EUR capital (up from 4 billion EUR).

Which means even more dilution for AIB shareholders.

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EXCLUSIVE: AIB's 7.5bn euro capital requirement

29 March 2010 21:48

by John Walsh
AIB's capital requirements are now believed to be 7.5 billion euro, which means that the Government will have to nationalise up to 80% of the bank. The market had been pencilling in a capital requirement of around 4.5bn euro for AIB but the non-Nama losses were much higher than expected.

Moreover, if the non-Nama losses in AIB are at a similar level in Bank of Ireland, sources close to the situation say that the Government will have to raise its stake in Bank of Ireland above the 50% that has been forecasted until now.

Government will make an announcement tomorrow about the exact funding requirements. There are strong indications emerging that Irish Nationwide and EBS will have to be fully nationalised when the Government announces its plans tomorrow. More to follow.
 
Various stuff:

Google News search for Irish Finance Minister Brian Lenihan:
http://news.google.com.au/news/search?aq=f&pz=1&cf=all&ned=au&hl=en&q=brian+lenihan

Irish Govt previously provided capital injections to AIB and BIR on about 12 February 2009.

This was 3.5 billion EUR (each bank) in the form of preference shares, convertible to common shares.

Link to AIB investor relations page, then click on the 12 February 2009 announcement:

http://www.aib.ie/servlet/ContentSe...tions/Display/LatestInvestorNews&channel=IRCA

Irish Examiner article of 12 February 2009:
http://www.irishexaminer.com/ireland/ideymhmhoj/
 
This Bloomberg article

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahYplq1tQnBU

says that Lenihan will address Dublin parliament at 5.30pm, which is 12.30pm ET.

This line from the Bloomberg article reminds me of the silly FRE / FNM situation:

"Once the capital buffers are announced, the focus will turn to how the banks will raise the cash."

Both banks have market caps of less than 2 billion EUR.

So if they need to raise more than 3 billion EUR each, then this does not bode well for shareholders, unless the govt provides ultra generous financing terms.
 
Irish Times article:

http://www.irishtimes.com/newspaper/finance/2010/0330/1224267344845.html

The National Asset Management Agency (Nama) is going to announce at 4.30pm today that it has started buying the first tranche of loans from Irish Nationwide Building Society and EBS building society, and that it will buy the first loans from Bank of Ireland at the end of this week.

4.30pm = 11.30am New York

Minister for Finance Brian Lenihan will then tell the Dáil at 6pm how much capital each of the five financial institutions participating in Nama – State-owned Anglo Irish Bank, Allied Irish Banks (AIB), Bank of Ireland, Irish Nationwide and EBS – will require and the level of ownership the State will take in the ones it does not already own in full.

6pm = 1pm New York
 
More details about the Irish Govt capital injection of 12 February 2009:

#
€3.5bn of perpetual core tier one non- cumulative preference shares with warrants.
#
- The preference shares have a fixed coupon of 8% and may be repurchased at our option. (280 million EUR per year)

Government is entitled to warrants over new units of ordinary stock representing 25% of existing share capital as enlarged by the warrants, exercisable after 5 years.

Warrants attached to the Preference Shares give an option to purchase up to 25% of the ordinary share capital of each bank existing on the date of issue of the New Preference Shares. The strike price of the first 15% of the Warrants exercised by the State shall be €0.975 for AIB and €0.52 for BOI. The strike price of the balance of the Warrants shall be €0.375 for AIB and €0.20 for BOI

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By way of reference, ALBK closed at 1.39 EUR on Monday 29 March.

The NYSE close was at 3.58 USD.
 
Update:

Looking very good so far.

At the time of writing, NYSE:AIB is down by over 12%, and the Irish listed ALBK is down about 18% to 1.12 EUR.

As I have mentioned before, but it bears repeating, once non-govt investors realise that there is govt involvement, the stock can very easily get caught in a self-reinforcing downward spiral towards zero.

Especially when a company with a market cap of less than 2 billion EUR is about to be told to raise over 4 billion EUR in new capital.

Share data:

ALBK (NYSE:AIB)

882.755 million shares

Market cap is about 1 billion EUR at a share price of 1.13 EUR.

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BKIR (NYSE:IRE)

1.118 billion shares
 
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