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What Are The Financial Implications Of Winding Up AIB?


rant_and_rave

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Oct 7, 2009
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What are the financial implications of winding up AIB? Could the Government sell the loan book to another financial institution, flog off the property and pay off the depositors? The Government has already assumed responsibility AIB's debts and AIB will never make money again.
 

Tawdy

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What are the financial implications of winding up AIB? Could the Government sell the loan book to another financial institution, flog off the property and pay off the depositors? The Government has already assumed responsibility AIB's debts and AIB will never make money again.



Are you interested in buying?
 

rant_and_rave

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AIB Losses - €10.2 Billion in2010, €2.3 billion in 2011, and €1.1 billion in 2012.

That's €13.6 billion that could have been spend on the health service.
 

Analyzer

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AIB is a Pillar of banking....apparently.....
 

SPN

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What are the financial implications of winding up AIB? Could the Government sell the loan book to another financial institution, flog off the property and pay off the depositors? The Government has already assumed responsibility AIB's debts and AIB will never make money again.

AIB will make money again, once its tracker mortgages are transferred to NAMA.
 

rant_and_rave

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AIB is a Pillar of banking....apparently.....
The Government should formally nationalise the Bank of Ireland, fold the Central Bank into the Bank of Ireland, transfer all deposits from those failing financial institutions which the Government indemnified to the Bank of Ireland and then shut down the failing financial institutions. This is the most efficient way to deal with the banking sector.
 

Boy M5

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The biggest issue is handing Richie Boucher a monopoly, Noonan isn't that stupid. Though it took 18 months for Vlad to work out the implications of handing over Aer Lingus to O'Leary.
 

gerhard dengler

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AIB Losses - €10.2 Billion in2010, €2.3 billion in 2011, and €1.1 billion in 2012.

That's €13.6 billion that could have been spend on the health service.
It is disgraceful that an insolvent (in 2008) and a continuous loss making operation is in receipt of any funding from the
taxpayers and citizens of Ireland.

Having said that AIB has a balance sheet €136 billion.

€136 billion of assets, matched to €122 billion of liabilities and €14 billion of retained capital (shareholder/joe public)
136 = 122+14.

Looking at her 31.12.2011 balance sheet would AIB be able to redeem fully, for example, €60 billion of customer deposits to each and every customer in the event of her being wound up?
 

Con Gallagher

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May 25, 2010
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2,413
Could it be done in an orderly way? Ie think about the chaos which ensued when Ulster Bank had its technical problem for a week or two.

Whatever about the merits of let it fold in 2008, but what would be the costs/benefits of doing it now?
 

Shpake

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Oct 17, 2012
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5,374
It is disgraceful that an insolvent (in 2008) and a continuous loss making operation is in receipt of any funding from the
taxpayers and citizens of Ireland.

Having said that AIB has a balance sheet €136 billion.

€136 billion of assets, matched to €122 billion of liabilities and €14 billion of retained capital (shareholder/joe public)
136 = 122+14.

Looking at her 31.12.2011 balance sheet would AIB be able to redeem fully, for example, €60 billion of customer deposits to each and every customer in the event of her being wound up?
Euro 136 Bn. Is that mark to market?
 

Fr.Ted Crilly

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Dec 7, 2012
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13,267
AIB will make money again, once its tracker mortgages are transferred to NAMA.
How long will it take it to pay back what we put into it?
 

RahenyFG

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Jun 17, 2010
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9,206
It would be bad news for potential first time buyers as AIB are the ones offering the lowest mortgage interest rate and it's already tough enough to get a mortgage without AIB being wound up.
 

FKALL

Active member
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Dec 27, 2012
Messages
132
How long will it take it to pay back what we put into it?
How much have we put into it?

€3.5 Billion for the preference shares (May 2009)
€3.7 Billion for equity shares (Dec 2010)
€5.0 Billion for equity shares (July 2011)
€1.6 Billion in contingent capital notes (July 2011).

less ELG/Blanket Guarantee fees of
2008/9 €239
2010 €306m
2011 €465m
2012 €205m (six months only)
Total €1.2 billion approx

So approximately €11 Billion net of ELG but this could rise to €12.6 Billion if the contingent capital notes are actually called upon.

What is truly amazing is that AIB has a Market Capitalization of €25 Billion based upon the latest share price of 5 cent and the 517 Billion shares in issue.

There must be a mistake in the above analysis as it looks like the government could break even or made a profit assuming it could sell its shares for 50% of the current price.

I acknowledge that tiny volumes are traded each day (relative to the shares in issue) but people are buying them.
 
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