We expect AIB to underperform, as the bank has a loan portfolio which is highly concentrated on construction and properties as well as residential mortgages, which constitute approximately 36% and 24% of total loan portfolio respectively. This leaves the bank highly exposed to the ongoing fall of the property sector in the regions in which it operates, with the property market in Ireland particularly badly hit. As a result…

On 11 May 2009, Allied Irish Banks PLC (AIB) issued its 1Q 09 trading update, noting that operating expenses are expected to come in lower y-o-y during FY 2009, reinforcing operating profit. However, bad debt provisions are expected to escalate y-o-y as a result of ongoing deterioration in the Irish economy, including rising unemployment. Considering the weak state of the economy, as well as company guidance, we remain concerned about the…

On 06 March 2009, Allied Irish Banks PLC’s (AIB) common stock rebounded sharply after hitting an historic low on 05 March 2009. However, considering the weak state of the Irish economy and its likely impact on credit growth, we remain concerned about the company’s growth prospects over our investment horizon. Therefore, even though the target price derived in our last update report does not support a HOLD, we maintain our HOLD rating. We will reassess our…