Investing ireland banks?If ireland defaults, and ireland backs their banks debt by law, then in essence ireland would be a good long term bank investment? |
Investing ireland banks?If ireland defaults, and ireland backs their banks debt by law, then in essence ireland would be a good long term bank investment? |
I think you are right, the Irish banks are as good a bet as Citibank, B of A and all the other major banks were 2 years ago, right after they got all that tarp money and their stock has seen an increase of triple to a 5-fold gain from their lows back in early 2009.
There are 2 Irish main banks to play, AIB and BIR. I have been holding AIB in Ireland for nearly a year already. Yes, I have made loss 30% from now but I still keep holding. I DO NOT recommend anyone to buy these trouble shares as investment because of their mounting debts BUT I bought them for a turn around hope in my portfolio for the next 5 years when things are back on track. I carefully decided to buy and hold AIB shares because Irish govt has had 93% stake in the bank and the most in banking sector in Ireland. The clear message from Irish govt (to me) that the bank will not go bust as 93% of irish tax payers still in AIB. It would cost irish tax payer too much to let it go easily. The irish govt had a choice not to help AIB at the first place but it was saved at the end. You can compare to Lloyds and RBS in the UK.
This is high risk, high return betting, not investing. Who knows the future of AIB, they might have their 1st profit announcement in next 2-3 years and the bank interest rate on the rise from now on. People should not have these shares type exceed 5% in their portfolios. I hope I have answered your question.
I don't know the facts but usually shareholders lose their money, people who have savings accts at that bank are insured..... I lost a lot with Royal Bank of Scotland.