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Moody’s could downgrade BOI

Moody’s has revealed that it may downgrade Bank of Ireland credit ratings in light of its exposure to UK and Irish downturns.

The credit rating agency says it has placed BOI’s debts and securities on possible downgrade: it revealed the bank’s B- financial strength rating
and Aa2 long-term senior debt and deposit ratings are at risk

The ratings of ICS building society, BOI’s Irish mortgage lending subsidiary, has also been placed on review for possible downgrade.

Moody’s vice president and lead analyst Ross Abercromby says: “The rapid deterioration in the economic environment in Ireland and in the UK is leading to a faster than initially anticipated deterioration in asset quality in both countries and this will lead to BOI, with its large exposure in both economies,
having to substantially increase its level of provisioning.”

The agency also says the bank needs to deliver a new business plan to the
FSA in the coming weeks. “The outcome of this will also be an important part of this rating review,” says Moody’s.

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