A tale of two banks
WITH Bank of Ireland and NIB both reporting their half-year results, last week was very much a tale of two banks. While BoI's loan losses fell by over half to just over €900m, the agony continued at NIB, with losses for the six months to the end of June rising by 14 per cent to €420m.
How NIB's Danish owners must rue the day they bought the Irish bank. The latest batch of loan losses brings NIB's total write-offs since the middle of 2008 to €2.14bn, over a fifth of its peak loan book of €10.6bn.
Whatever the cost to its owners, NIB has served a very useful function during the banking crisis. While most other banks have tried to minimise their losses, the Danes have opted to tell it like it is. This probably means that things are still getting worse for the banks.
The BoI share price of just 9.5c, half a cent less than the price paid by a group of international investors for a 35 per cent stake last month, seems to be saying the same thing.
Sunday Indo Business