Shares in Irish Life & Permanent have again fallen sharply in Dublin after another credit rating agency lowered its outlook for the company.
Moody's said it was lowering its outlook to negative because of the company's high reliance on the wholesale market for funds and because it was expecting lower profits as the economy deteriorated. It also cited IL&P's relatively high level of lending to property investors.
Credit rating agencies rate the ability of banks and other companies to meet their financial obligations and their ratings are watched by those who lend money in capital markets.
Moody's said that customer deposits accounted for just under a third of IL&P's funding, lower than other banks. The cost of money on the wholesale market has become more expensive because of the credit crunch.
The agency said it would 'closely monitor' the weakening Irish market and the group's exposure to buy-to-let lending.
A spokesman for Irish Life and Permanent said: 'Moody's has effectively confirmed a strong set of ratings for our operating businesses. While the outlook has been downgraded to negative that is more a reflection on the Irish economy than on any specific stock.'
Last week, another agency, Standard & Poor's, lowered its rating for IL&P. Shares in the company closed down 59 cent (10%) at €5.36 in Dublin.
