Chart of the week: Allied Irish Banks comes back to life

On 25 March 2010 Allied Irish Banks (known simply as AIB), was trading at over $23 a share. However, as the chart below shows, by October 2011 it had lost 98.36% of its value.

Now, having flatlined for almost a year, the nationalized commercial bank has shown the first sign of life (circled).

A 3 year daily chart of Allied Irish Banks Plc (Click on the chart for a larger version)

A 3 year daily chart of Allied Irish Banks Plc (Click on the chart for a larger version)

Chart courtesy of stockcharts.com

On 30 September 2010, the Irish Government effectively nationalized AIB by injecting €3.7 billion of capital into the troubled firm, making it the fourth of Ireland’s “Big Six” financial institutions to be nationalized.

According to Wikipedia, “AIB needed to raise additional capital due to increasing losses on bad loans incurred from the real estate bubble, and Irish Finance Minister Brian Lenihan stated that the bank was unable to attract sufficient interest from private investors.”

The bank, in which the Irish government now owns a 92.8% stake, is currently undergoing a restructuring and ratings agency Fitch’s recently revised its outlook on AIB Group’s long term Issuer Default Rating from negative to stable.

However, with property prices in Ireland expected to fall by another 20%, further losses for the bank seem likely.

AIB may now have a pulse but it’s a long way from healthy.

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