Moody's decision to lift Ireland's debt rating to stable from negative still leaves the country with an "undeserved" junk rating of Ba1, writes Richard Barley. Nevertheless, it's a significant step in that it's Moody's first positive action on one of the EU's periphery since the financial crisis. Moody's has been the toughest on Europe's troubled countries, and other agencies still have Ireland firmly in investment-grade territory.
The most important part of the move seems to be how Ireland's fate now rests in its own hands, rather than eurozone considerations, and Moody's has finally conceded the country is at much-reduced risk of losing access to financial markets again. In fact, Irish 10-year paper yields less than similar Spanish or Italian maturities.
The New Ireland Fund (IRL -0.3%) is up 30% YTD. Bank of Ireland (IRE +0.9%) is up 80%.
Bank of Ireland (IRE -5.3%) is an outlier, tumbling as the rest of Europe and the European banking sector (EUFN +1.4%) in particular put in a strong performance. Maybe moving the shares is SocGen initiating the red-hot stock with a Sell rating.
Bank of Ireland (IRE -6.6%) continues to slip, perhaps still stung by Goldman's downgrade to Sell yesterday. One wonders if the bank's return to the bond market in late May - when an issue of $650M in unsecured 3-year notes was 3x oversubscribed and priced to yield 2.75% - wasn't ringing some sort of bell. "Investors will get absolutely shellacked," says an asset manager. "As rates rise, investors will get savaged by both interest rate and credit risk."
Following a 5-month 43% move higher in the EUFN, the European financial sector is upgraded to Neutral from Sell at Credit Suisse. Earlier this week, Meredith Whitney turned bull on the U.S. financial sector after its torrid 2012 run.
Bank of Ireland (IRE) plans to return to the public debt markets after a 2-year hiatus with a €500M sale of 3-year covered bonds. Amidst widening net interest margins (eat your hats U.S. banks) and lower loan losses, the bank appears to be nearing the end of needing government support. Shares +2.8% in London.
Bank of Ireland (IRE) posts an operating loss of €907M in H1 vs. a loss of €722M a year ago. Toss in asset disposals and the loss rose to €1.09B. Net interest margin fell 13 basis points to 1.2%, though the CEO expects it to strengthen from here (even as the ECB cuts rates?). Shares -6.1% in London.
Goldman resumes coverage on the Bank of Ireland (IRE), reinstating it at Neutral with price target (London shares) of £0.13 vs. the current price £0.102. The ADRs - up 34.2% YTD - trade at a far higher price following a 1:10 reverse split late last year.
Citigroup says sell Bank of Ireland (IRE), but Emerging Money's Jonathan Yates thinks that means it's time to buy. Some of IRE's attractive ratios: price-to-book, 0.50; price-to-sales, 0.88; debt-to-equity, 0.14. "If the Bank of Ireland made it through The Great Recession, it is here to stay, and long-term investors will profit when when the economy recovers and the stock rises again."
Bank of Ireland (Governor & Co of) provides financial services in Ireland to all sectors of the Irish economy. These include checking and deposit services, overdrafts, term loans, mortgages, business and corporate lending, among others.