View more on these topics

Fitch downgrades Irish banks

Fitch Ratings has downgraded both the Allied Irish Bank and the Bank of Ireland as it predicts further government bailouts.

Fitch has today downgraded both banks’ Long-term Issuer Default Ratings to ‘A-‘ from ‘A’ after yesterday’s downgrade of the Long-term IDR of the Republic of Ireland from AAA to AA+.

At the same time, Fitch has placed AIB’s Individual Rating of ‘D’ and BoI’s Individual Rating of ‘C/D’ on Rating Watch Negative. Fitch has also downgraded the banks’ subordinated debt and hybrid instrument ratings.

The rating agency’s stance reflects its expectation that the two banks might see larger losses in the current financial year when certain commercial property loans are transferred to Ireland’s National Asset Management Agency at a discount. Fitch says this might result in an acceleration of credit losses potentially exceeding the banks’ operating profit this year and probably absorbing some of the banks’ capital.

As a result, Fitch believes that further capital injections on top of the combined Euro 7bn already received may be needed. The agency will examine over the coming weeks the size of the potential losses and therefore to what extent the banks’ profitability and capital might be impacted.

Fitch also expects further deterioration in the asset quality of the banks’ residential mortgage and corporate loans books due to weaker prospects of the Irish economy and rapidly rising unemployment which will put the banks’ profitability under continuing pressure.


Ireland tries to stabilise economy

The Irish government has announced the details of an emergency budget designed to shore up the country’s flagging economy.Pre-Budget data published last week show a €5 billion (£4.5 billion) widening from the budget deficit projected in January.Brian Lenihan, the finance minister, has proposed a raft of tax increases which should generate €3.6 billion over the […]

Artemis Global Income: Making sense of global markets

The rally in cyclical ‘value’ stocks paused for breath in February, as investors took a more cautious tone and switched their attention back to defensive areas. In this article, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, explains how he has positioned the portfolio, given the many economic, geopolitical and policy risks that […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm