Credit rating agency Standard & Poor's has issued a new report on Irish banks in the light of the 'rapidly weakening' Irish economy and depressed Irish and UK property markets.
The agency says the Irish banking system will remain solid, and that while increasing bad loans are a concern, they will not be enough to hit the banks' earnings.
'Medium-term prospects for the Irish banking system remain bright; however, over the... next two years, the weak economy will weigh on performance,' said credit analyst Nigel Greenwood.
S&P renewed its ratings on five of the six banks: AIB, Bank of Ireland, Anglo Irish, IIB Bank and Ulster Bank. But it lowered its rating on Irish Life & Permanent from A to A+, saying its Permanent TSB banking arm had been worse hit than other banks by the disruption in credit markets.
The report also changed the outlook for AIB and Bank of Ireland from positive to stable, meaning it sees an upgrade in their ratings as unlikely in the next couple of years. It also lowered Anglo Irish Bank's outlook from stable to negative, citing its focus on commercial property and warning that a sharp deterioration in the quality of its loans could put pressure on its funding position.
Irish Life & Permanent shares were down 7% at €6.83 in Dublin this afternoon, while Bank of Ireland and Anglo Irish both lost more than 5.5% to €5.52 and €6.14 respectively.
Credit rating agency Standard & Poor's has issued a new report on Irish banks in the light of the 'rapidly weakening' Irish economy and depressed Irish and UK property markets.
The agency says the Irish banking system will remain solid, and that while increasing bad loans are a concern, they will not be enough to hit the banks' earnings.
'Medium-term prospects for the Irish banking system remain bright; however, over the... next two years, the weak economy will weigh on performance,' said credit analyst Nigel Greenwood.
S&P renewed its ratings on five of the six banks: AIB, Bank of Ireland, Anglo Irish, IIB Bank and Ulster Bank. But it lowered its rating on Irish Life & Permanent from A to A+, saying its Permanent TSB banking arm had been worse hit than other banks by the disruption in credit markets.
The report also changed the outlook for AIB and Bank of Ireland from positive to stable, meaning it sees an upgrade in their ratings as unlikely in the next couple of years. It also lowered Anglo Irish Bank's outlook from stable to negative, citing its focus on commercial property and warning that a sharp deterioration in the quality of its loans could put pressure on its funding position.
Irish Life & Permanent shares dived 10% to close at €6.61 in Dublin this evening, while Anglo Irish Bank sank 8.5% to close at €5.95. Shares in Bank of Ireland were down 6% to €5.52 and AIB closed 2% lower at €9.79.
