Have you ever wondered who are these evil shareholders of the Irish  banks, whose selfish and greedy speculation in the financial market has so badly injured the national interest and brought us to the edge of economic ruin?

Well, the two main banks with the most “toxic” of assets are Anglo Irish- whose shareholder is now the State, and formerly a relatively small number of “golden circle”, politically-connected types- and Irish Nationwide, whose “shareholders” are actually “members”, who contributed their savings in order to build up a little down payment towards an eventual mortgage.  The vast bulk of those who bought shares in Irish banks on the stock exchanges – and whose property is being taken in NAMA-  are shareholders in Allied Irish Banks (AIB) or Bank of Ireland (BOI).  From the annual reports of those banks we have some idea of who they are or what they look like:

At December 31, 2008, AIB had c. 90,000 shareholders, of whom 95% had less than 10,000 shares each (55% less than 5000 shares). These are classified as “retail” investors and they traditionally accounted for ownership of c. 35% of the bank’s total equity capital, the balance being held by a few- c. 350- “institutional” investors.  Eighty four (84%) percent of the retail investors were residents of the Republic of Ireland.  Since the crisis in the last year, it seems that big, mostly foreign, institutional investors dumped the shares but most Irish retail investors held on, losing up to 95% of the value of their investments. (Recently, the shares have regained about 15% of their maximum value). As a result, retail, private, Irish-based investors are now estimated to own about 65% or more of AIB.

The story in BOI is similar. They have 99,000 shareholders, as at March31 this year, 90% of them holding less than 10,000 shares each. In BOI’s case, 52% of total equity was Irish owned at March 31st.

These shareholders are therefore not big wealthy speculators. In fact, the motivation for most of them is long term secure value, expressed in regular annual dividends, – the prospect of getting a few thousand every year towards the christmas expenses or the nursing home charges. It is felt that, typically, they are middle aged or older. They are our Momas and Pops, that’s all…nothing more sinister than that. And they have lost the great bulk of their savings invested in the banks and all their dividend income. Some may be destitute. (I know one couple in their seventies living in a caravan in Kerry, having lost their house and most of their income and ashamed to see their friends. The wife is suffering severe depression and the husband is going blind from macular degeneration )

Apart from these individual shareholders- probably in the region of  c. 150,000 of them, given that some would have had shares in both banks- the major investors would now be the Irish Pension Funds, who have traditionally been heavy investors in Irish banking shares, deploying the pension contributions of their clients- up to 800,000 Irish workers.

Considering, therefore, how many small time prudent savers are involved, it is strongly in the national interest that bank shares should increase in value again, and that banks should be able to restart their regular annual dividend payouts. It is not in the national interest that the State should be allowed to raid these two banks, as a temporary quick fix for the emergency in the mis-managed public finances, and without even acknowledgement of the fact of the raid. And it is surprising, even amazing, that no professors, economists, or political or social commentators seem to recognise what is going on.