Allied Irish Bank (AIB) is one of the big boys of Irish banking. They pretty much do it all: corporate banking, retail banking, investment banking, asset management,etc. This company got killed in the last year, losing about 80% of it's value. It reached a 52-week low of 72 cents back in March. It's yielding 40% and is still cheap on a P/BV basis. It's selling for 0.16 of price to book! It's also selling for far less than the cash on the books.
What are the risks? Well this company was involved in pretty much every frothy real estate market in the West, especially Ireland. It's still unclear if the all the damage has been done. Their Tier 1 capital ratio is about 7%, which indicates that it's wouldn't be in a great position to sustain further massive losses. For instance, a conservatively-financed bank like State Street (STT) has a tier 1 capital ratio of 13.5%. I would say that you ideally would want the bank to be 10% or above in this environment. Still, it all depends on your loan portfolio. They also need to raise a significant amount of money next year in order to further solidify their balance sheet. They may sell some American and Polish assets in order to do this.
The bottom line is that this is a speculative pick in the short-term, but long-term, unless you think that the Irish growth story is dead, should pay off handsomely for the patient investor.
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