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Jeremy Masding, Permanent TSB |
Illustrations: Pete Ellis |
It is hard to exaggerate the swings in fortune in Irish banking over the past five years. In 2011, after one of Europe’s most severe property crashes, Ireland joined Greece and Portugal in suffering the indignity of an EU and IMF bailout. The country’s biggest retail lender, Allied Irish Banks, faced an existential challenge, “would you survive, or not?” as AIB’s chief executive Bernard Byrne describes it. Today, Ireland’s economic growth is only a couple of percentage points off that in China. The banks’ reliance on central bank funding is almost back to pre-crisis levels and funding costs are falling, boosting margins. The largest bank by assets, Bank of Ireland, is one of Europe’s most-profitable and best-valued banks. Both Bank of Ireland and AIB reported their first post-crisis annual profits in 2014.
In 2016, the Irish government’s priority is the sale of its 99.8% stake in AIB, while it may also be considering the sale of its 14% stake in Bank of Ireland. The latter’s planned redemption this month of €1.3 billion in preference shares, issued to the government in 2009 and sold on to private investors in December 2013, is another milestone.
