THERE was a tale of three banks playing out towards the end of last week, as Bank of Ireland, AIB and the defunct IBRC were all in the news.
Scene One: Friday 9.30am, O'Reilly Hall, UCD. Around 200 shareholders file into the large room in UCD for the Bank of Ireland's annual general meeting. Some of them bought their bank shares at 10c each. Others bought at closer to €10!
The bank delivered a fairly upbeat assessment of how the bank was performing. Upbeat might be too strong a word. The good news was that it was trading in line with expectations, is back to making some money and the number of loans in default continues to fall.
The not-so-good news is that its loan book is still contracting and the bank had €83.3bn in outstanding loans at the end of March – €1.2bn less than it did three months earlier. Customers are paying down more in existing debts than the bank is giving out in new loans.
Even the bank's own target "steady state" is €90bn. This means even the bank that is performing best in the country right now is not in a position to help drive significant economic growth through higher lending. Thus, we are not going to see businesses grow very much in this environment.
Chief executive Richie Boucher was always going to be a target for his €843,000 per year remuneration. He has brought the bank back to profitability and through a massive crisis, but shareholders have been financially roasted and still aren't getting dividends.
Some of them were more critical of the bank's mortgage arrears policy of no write-offs in solvency proceedings. Small shareholders who want dividends and debt write-offs might have to re-examine their views. But perhaps it took the owner of a small business to say it succinctly – that he didn't want dividends generated on the back of a relentless pursuit of defaulters.
Like other banks, Bank of Ireland has to find the balance between commerciality and compassion.
Arguments about Boucher's pay packet are not as incendiary as they used to be. Small shareholders might not like it, but the smallest shareholders of all are the taxpayers up and down the country who never wanted to own any of the bank.
At least they are seeing the State get back more money than it put into Bank of Ireland after the banking crisis of 2008. It is up to shareholders and not ministers to decide how much these guys get paid.
The same could not be said of AIB.
Scene Two: Thursday. AIB head office in Ballsbridge in Dublin confirms that the latest €280m owed to the State on its €3.5bn of preference shares will not be paid in cash next month. This means it will probably have to be paid in more shares. It will probably take around 28 billion new shares at 1c each to cover the bill. This will be added to the 521 billion AIB shares already issued. And around 99.8 per cent of those are held by the State.
The problem is that the bank is finally gearing up to make a profit this year. Once that happens, AIB might be in a position to sort out its complex and essentially redundant share structure. Tidying it up will make it easier to find a buyer for a chunk of the bank. That is the theory anyway.
However, AIB has already devoured €20bn of taxpayer money and there still isn't any immediate sign of some of it coming back. If it wrote a cheque to Michael Noonan for €280m next month, it might impact negatively on its overall financial performance this year. This in turn could reduce the amount the State might get back when it sells some of it.
Unfortunately, it always seems to be jam tomorrow when it comes to AIB. It keeps getting closer to paying back some State money, but doesn't quite get there.
Noonan recently said that the bank had been independently valued at €10bn to €11bn. That would make its 521 billion shares worth about 1.9c each. Yet, incredibly, a handful of its shares continue to trade on the stock market at around 12.3c. This values the bank at €64bn and is a form of madness that somebody needs to stop.
Scene Three: Friday, the Department of Finance on Merrion Street. The mandarins have been adding up the figures from the sale of loans by the IBRC liquidator. Some clarity emerges and its good news but not great news.
The liquidator has sold €19.8bn worth of former Anglo Irish Bank and Irish Nationwide loans. He has taken in more than the €12.9bn at which they were valued when the IBRC liquidation occurred.
The good news is this means the €34.7bn bill for bailing out the two lenders is unlikely to get any bigger. However, there is around €1.9bn of loans left unsold. These were due to go to NAMA if they were not sold.
While the liquidator received equal to or more than the initial value placed on everything he sold, flogging off the last €1.9bn would see them go for less than originally expected. That is not so great.
Transferring them over to NAMA could be even more messy because it would make NAMA bigger at a time when there is a good case for trying to make it smaller. But NAMA is also prohibited by law from selling assets at less than the value it carries them on its books. This could prove very tricky if the situation with these loans got even worse.
These must be the true commercial dregs of Anglo and Irish Nationwide. It probably makes more sense for the liquidator to sell them off, even at a bad price, and not bother further lumbering NAMA with them.
The potential loss on these will eat into the better-than-expected outcome on the rest. It isn't ideal by any means but alternatives are running out.
So we have three lenders with three different stories from the world of post-apocalyptic Irish banking. Five-and-a-half years on from the crash, it is getting better, but still isn't pretty.