Year in review: Return to bond markets a sign of a happier future
BANK of Ireland and AIB's return to the bond markets puts a decent gloss on a year that may prove to have been a game changer for the banks.
It means bankers go into 2013 with investor cheers rather than the well-placed criticisms of central banker Fiona Muldoon ringing in their ears.
The bond deals were done because of signs that both unemployment and mortgage arrears are stabilising.
While both remain high, the pace of increase is slow enough to tempt foreign investors, especially when the yields on offer are a multiple of those available in core Europe.
The decision by Mario Draghi to turn the European Central Bank into a lender of last resort helped by dispelling fears that Europe was on the brink of a second round of bank failures.
All of the banks remain fragile, however, because of mortgage and SME arrears. Personal insolvency schemes coming into force next year could shake things up even further.
Still, a shift is under way, and Bank of Ireland has done most to present itself as a recovery story.
Chief executive Richie Boucher's brusque delivery wins him few friends, but he has the backing of shareholders – and not just for keeping Bank of Ireland out of state control in 2011.
His was the first bank back into the bond markets this year, and is growing market share with lending to home buyers and small and medium enterprises.
Lending targets for next year are up, though borrowers can expect to be squeezed on price and savers should anticipate aggressively lower yields.
Finance Minister Michael Noonan had cause to be grateful too when a loan from Bank of Ireland helped him avoid this year's Anglo Irish Bank promissory note payment.
AIB's David Duffy spent much of his first year at the helm focused on internal restructuring.
A programme to cut 2,500 jobs provided the opportunity to completely overhaul management, both in terms of personnel and structures. The decision to close 67 branches was cost-driven, despite attempts to present the move as a drive to shift customers to digital banking.
It's high risk.
Business owners and farmers prize direct access, even at the best of times.
At the worst of times, bricks and mortar branches remain an essential link to worried customers, as Ulster Bank found over the summer.
With hand-picked people now in key positions at the bank, any failure to deliver next year will be on the chief executive's shoulders.
Results so far are mixed.
AIB is more nimble than it was, evidenced by the speed it put a bond deal together last month to successfully ride on the coat-tails of Bank of Ireland's earlier success in the markets.
It was a smart move and well executed.
A bailout of the AIB pension pot was less deft. The bank used €1.1bn of state-owned assets to strengthen the pension scheme to cope with early retirements, but failed to put in safeguards to stop the benefits also going to the pensions of former executives.
The resulting outrage blotted Mr Duffy's political copybook when Mr Noonan and Enda Kenny both joined in the hand wringing.
Bankers' pay was also in focus at IBRC, the former Anglo Irish Bank, when it emerged that an entire cast of senior executives are on pay deals that stretch the concept of the €500,000 cap on bankers' pay past breaking point.
The big story there continues to be the war with the family of Sean Quinn for control of hundreds of millions of euro of international property assets playing out in courtrooms, jail cells, cross-border rallies and the offices of international private investigators.
The bank will be a big player in next year's attempts to prosecute former executives Sean FitzPatrick, Willie McAteer and Pat Whelan, but the cases will rake over coals that could yet reignite, particularly any evidence to support claims for relief by borrowers or former shareholders in the bank, including Sean Quinn.
Any action to restructure the Anglo promissory note will happen over the bank's head.
Ulster Bank had a horrific year. Property losses mean the bank continues to be the "biggest headache" for its UK state-owned parent, RBS.
A month-long IT failure was a total disaster, particularly when customers here were worse affected than customers of RBS in the UK.
Rumours that the bank could shift its headquarters to Belfast didn't help, prompting speculation that the country's third biggest bank could leave the Republic altogether.
A hefty fine from the Central Bank for regulatory breaches capped the year.
If Ulster Bank does go, it leaves state-owned Permanent TSB as a "third force" in Irish banking.
Now under the control of new chief executive Jeremy Masding, Permo is the bank in most need of radical overhaul. It's big issue: tracker mortgages, cheap for borrowers but loss-making for the lender.
Permo will benefit most if Mr Noonan can get Europe to take a stake in Irish banks next year, but he will be hoping for a win on the Anglo promissory note before he'll seek a deal from the European Central Bank to take a stake in our banks.
A win on either front would be good news, but a win on both fronts would really make 2013 the breakthrough year for the banks and for the country.