NAMA, government propaganda and AIB

The EU Commission has saved the Irish people from the worst excesses of NAMA by telling FF and their poodle that the 30% reduction in property transfers is inadequate and will not be allowed because it is in effect a handout from the Irish state to the banks. The government tries to pretend that the EU gives its blessing to their proposed plan when in fact each loan will have to be assessed on a case by case basis and not the original blanket discount plan. A consequential effect of this is to further enrich the valuers and lawyers involved in the property business. NAMA clearly is a mistaken policy and will be seen to be so over time when the whole population wakes up to the Cowan/Lenihan nightmare legacy. Development land in Athlone bought for €31 million now is worth only €600,000 about a 98% reduction.

My conclusion was and still remains that the AIB/BoI will be under state control by the end of summer. Therefore the public has a vested interest in any sale by AIB of the Polish Bank Zachodni (70.3% owned by AIB) or the US bank M&T or its UK subsidiary. AIB had an operating profit of €2.9 billion offset by bad debt charge of €5.3 billion. Currently AIB needs €4.4 billion to bolster its capital reserves. The sale of M&T may make only €900 million. The Polish bank is making €309 per year and the figures may indicate that the Irish public interest is better served by retaining it in ownership. On the plus side, AIB has written down €4.1 billion against the NAMA bound loans and AIB will now be transferring €23 billion headline loans to NAMA, about €1.1 billion less than the original estimate. AIB also INCREASED its Irish lending by 1% in 2009 and provided €2.5 billion to the small-to-medium sized business sectors.

AIB looking for strategic partners as investors is typical of an attitude of virtual contempt towards the people of Ireland who are their guarantors.

Meanwhile, the bank workers can expect redundancies and bank customers will suffer higher changes and margins all round.

These boys (and it is ‘boys’) have put banks before people. Cowan and Co, economic undertakers of Clara should have as their epitaph – “Banks before people”