Daire O'Brien: Stolen laptop saga speaks volumes about bank 'spin'
Thursday April 24 2008
The Bank of Ireland laptop saga proves once again that when it comes to fraud protection, the financial institutions are only interested in preventing fraud against themselves, not their customers.
At the time that 'chip and pin' technology was introduced, it was spun by the banks as a great fraud buster and an example of their technological investment in protecting clients' cash.
The real purpose of the technology was to shift financial responsibility for security lapses from the banks' balance sheet and on to the customer.
Ask yourself, what benefit have you got from all this technology. Have your bills got smaller? Have the banks protected you any more?
They have in their foot.
The laptop saga bears out this attitude.
Nobody got in touch to warn those whose details had been exposed. The only thing the banks did was make sure their own rear-ends were protected.
The bank is hiding behind the fact that it was only informed of the thefts after the event, and "in the past number of weeks", which is PR-speak for six weeks ago.
If the bank feels that it has been misunderstood, yet again, then a simple course of action remains open to it.
It can publish all details of when the thefts occurred, where, how they came to light and what measures were taken to protect the 10,000 customers.
Everything else is flim flam.
Bookies taking a punt on 'Paddy factor'
Why is it that the bookies think we'll feel better about doling out our dough if they dress up their public persona like floats at a Paddy's Day parade?
While Paddy Power adorns itself in the imagery of a boozy leprechaun, Cashman's logo is the harp, a gesture which proclaims its unapologetic Irishness.
Ivan Yates chose the name Celtic for his chain when it was launched back in the late 1980s and all this Paddywhackery stems from the arrival of the UK betting chains at the time.
Life has changed, however, and the industry -- which has quadrupled in revenues in less than 20 years -- is poised for more rationalisation.
Rumours reach us that Yates, who paid over €5m for the Joe Molloy chain of bookies in August 2006, may be about to get out the cheque book once more.
Celtic Bookmakers chain is whispered to be in discussions with Cork's Liam Cashman about a possible takeover of the latter's 10-strong chain of shops.
After Boylesports, Celtic are the largest of the so called 'independents' with over 60 shops.
Celtic aims to put itself in a competitive position with Ladbrokes, Powers, William Hill and Boyles, all of whom have well over 100 shops.
It takes Spanish cash and guts to beat credit jitters
Surely no major European bank is trading higher than it was 12 months ago? Well, actually, there is one.
Banco Santander, with a market capitalisation of approximately €140bn, seems to be immune to global banking jitters and is trading at slightly higher than a year ago and some 30pc higher than it's recent lows. So why does the global market rate the stock so highly? Surely exposure to the highly-property dependant Spanish economy would be enough to dampen down the share price ?
It has a market leading presence in its home market and has swerved the subprime contagion.
It made over €7bn last year and, more to the point, it is one of the few institutions with enough cash -- and guts -- to buy up assets at knockdown prices. It recently bought about €1bn worth of consumer business from GE Money as well as spending €2.2bn on RBS' European Consumer Finance Business. It would seem that the easiest (only) way to raise cash quickly in banking circles is to sell painstakingly created consumer businesses.
Funny old world when all the fancy stuff on the balance sheet can't be turned into foldies and the new sexy side of banking is the loan and deposit business of normal mugs with credit cards, personal loans and low LTV mortgages.
Remember where you heard this first
At the moment there's no real point in recommending Irish stocks as the market continues to yoyo and, lets face it, everyone is praying we're not at the beginning of a right panic.
We got a bit fortunate a few weeks back pointing out that Horizon was a decent bet prior to the announcement that it had been subject of a bid and, on the other side of the fence, we mentioned in February that CPL Resources - though a good company - was likely to fall further.
However, I cannot get the sub €9 price of Bank of Ireland out of my thinking, so here goes a nice juicy hostage to fortune.
At the time of writing, the share price is at €8.80.
Tune in next week and I'll bet it has hit at least €9.50.
- DAIRE O'BRIEN
