Another blue Monday for bank shares

News At One: George Lee, Economics Editor, is in studio to discuss the latest developments in the banking crisis in Ireland and Britain
News At One: Stuart Draper, Director of Stockbroking at Dolmen Securities, explains the reasons behind today's dramatic day of trading in bank shares
Business Today: Value of Irish bank shares is halved
Business Today: Davy analyst Scott Rankin said there was an international dimension to the fall in Irish bank shares
Business Today: Professor Tom Honohan of the economics department at Trinity College Dublin said there is pessimism in the markets about future profits and dividends from the banks
One News: Adrian Lydon reports that shares in AIB and Bank of Ireland fell to their lowest levels ever this morning, and several directors have resigned

Monday, 19 January 2009 19:03

The value of shares in the big three Irish banks more than halved in Dublin today after the nationalisation of Anglo Irish Bank late last week failed to ease concerns about their future.

The fresh plunge came as Bank of Ireland announced that its chief executive Brian Goggin would retire this summer.

Shares in AIB closed down almost 60% to 60 cent. Bank of Ireland ended down 55% at 34 cent. Both of these were new low points. Irish Life & Permanent also fell 50% to €1.10.

Today's falls come in the wake of market suggestions that Bank of Ireland and AIB look unlikely to be able to raise extra cash from private investors to top up a proposed state investment in the banks.

They also came as banking shares across Europe also fell sharply after Britain launched a second bank rescue plan and Royal Bank of Scotland signalled the biggest loss in UK corporate history.

Meanwhile, a Bank of Ireland statement said its board of directors had started the process of looking for a new chief executive. It said the search would include internal and external candidates.

Mr Goggin, 56, has been chief executive since June 2004 and has been with Bank of Ireland for 40 years. In a statement, Mr Goggin said the most recent period had been difficult, but said the Government's decision to support the bank's recapitalisation 'provides a basis on which the future of the bank can be built'.

BoI Governor Richard Burrows said Mr Goggin always had the best interests of the bank at heart. 'I believe this has motivated his decision to seek retirement this summer to make way for fresh leadership,' he added.