IRLBF---BKIR TRADING IN OTC IN NEW YORK (fka )

[mlkrborn]

BKIR reported earlier it seems..
http://moneyam.uk-wire.com/cgi-bin/articles/201111111105129447R.html?epic=BKIR

.....
"DAVY's interpretion:
Bank of Ireland

BKIR ID

Publishes a solid trading update

11 November 2011

Emer Lang

Closing Price: 9c Rating: Outperform Issued: 04/11/11 Previous: Neutral Issued: 07/09/10



FACTS: In the midst of heightened macro uncertainty and speculation around Irish mortgage arrears/pricing, Bank of Ireland (BKIR) has published its IMS ahead of schedule.

ANALYSIS: The bank expects its net interest margin in the second half to have stabilised versus the first half (1.33% before guarantee fees) as higher funding costs have been offset by some recovery in lending margins and the interest income benefits of lower subordinated debt and increased capital. However, it cautions that further margin recovery will face some headwinds in a more prolonged period of low interest rates. Deposits have grown to €67bn from €65bn at both December and June, a strong performance given that the bank lost €3bn of temporary NTMA deposits in July. With redemptions and book run-off on schedule and the recent €5bn loan disposals, the key LTD ratio has fallen from 164% at June to 153%. The deleveraging is reflected in a circa 10% reduction in wholesale funding, from €61bn at June 2011, including a significant reduction in drawings from Monetary Authorities (the Central Bank has revealed its ELA facility to Irish banks stood at €47.7bn at end-October, down from €53.3bn at end-September).

Other income in H2 is expected to recover from H1 (when two once-off items cost €110m), but it will be impacted by hedge volatility and an investment variance, reflecting market volatility.

Asset quality remains broadly in line with the bank’s expectations; relatively improved performances in its unsecured consumer, UK Mortgage and Corporate Banking books are being offset by some deterioration in Irish mortgage arrears in August/September 2011. The bank cites the considerable public speculation about potential policy measures regarding customers in arrears as a possible factor driving the arrears trend; this echoes comments from KBC, which blames such speculation for a change in customer behaviour.

DAVY VIEW: Against the background of uncertainty, this is a solid statement showing that BKIR is making good progress in restructuring its balance sheet through deleveraging while growing customer deposits. We expected a cautious margin outlook on the basis of a flatter interest rate trajectory; we recently cut our 2014 margin from 1.8% to 1.68% to reflect this. That the trend in Irish mortgages has deteriorated comes as little surprise. News that asset quality overall remains broadly in line with expectations is encouraging, although the bank cautions that its Irish residential mortgage book and commercial real estate markets are issues. All in all, we don’t anticipate any significant changes to our forecasts arising from the statement. "