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Paul Harris, CFA Allied Irish Bank PLC AIB-N DON'T BUY Sep 23, 2010

Irish economy is in a difficult situation and there are a lot of real estate issues. Government owns most of the shares. It will take a long time to work out.

Paul Harris, CFA

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$1.550

Stock price when the opinion was issued

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HOLD

Has been in the downdraft of the Bank of Scotland and Icelandic Bank meltdown. Doesn't think it's a zero candidate, so not worth selling it at this point. Will perform as well as other financials. Will probably take 2 years to turn around. Profitability of the financial sector is going to be hurt. Thinks the yield will be cut in half at some point.

DON'T BUY

Huge problems with its loan portfolios. Prefer Standard Chartered or HSBC.

BUY ON WEAKNESS

Similar to many of the English banks in that the government took them up as Ireland fell into a deep recession. Irish economy will probably come back because of low tax rates and educated workforce. Expect they will do an equity issue to increase their tier 1 capital.

BUY ON WEAKNESS

Was highly involved in the real estate market and over invested and over loaned and had a tremendous problem when liquidity crisis occurred. Essentials of economy are strong and they had a net immigration into the country. It ran up after the low and had quite a good, then pulled back. Short term there will be volatility.

BUY

Suffered from the overheating of the property market in Ireland. Banks are very much a proxy for the economy of the country they are in. Ireland is a great economy with a young well educated work force with low tax rates. It will come back but may take a while. This may be a good opportunity.

WEAK BUY

Have a major job in repairing their capital ratios and balance sheet. Thinks there will be significant asset sales to accomplish this, which makes it difficult to evaluate. OK for risk capital and you are interested.

WEAK BUY

Will probably go up in the next 3 or 4 years. Banking sector was hit badly in Ireland. You will have to wait it out a long time if you buy it now. The government will back it up.

DON'T BUY

Irish bank that will probably end up being fully owned by the Irish Government in the next little while. Would prefer Bank of Ireland (IRE-N) as their lending book is much better and didn’t rush into international investing.

RISKY

Insolvent for all intents and purposes. Might be used in an options strategy.

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Paul Harris, CFA Allied Irish Bank PLC AIB-N DON'T BUY Sep 23, 2010

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