BANK OF IRELAND TO CUT DIVIDEND BY 50% - Bank of Ireland issued a trading statement this morning. The statement describes how the economic downturn here and in the UK is impacting the business and also gives us an insight into how much of its €140 billion loan book is falling into arrears. The bank is cutting its full year dividend by 50% and it says the arrears situation on its loan book is set to worsen.
Kevin McConnell, head of research at Bloxham Stockbrokers, said the bank was cutting the dividend to strengthen its capital position. That will save the bank around €300m. He says that while it appears to be bad news for equity shareholders in the short-term, it is actually beneficial in the longer term as it replenishes the bank's capital. He says it is an injection of confidence.
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MORNING BRIEFS - In a move aimed at averting a new global economic shock, the US Federal Reserve agreed last night to an unprecedented $85 billion rescue loan for American International Group.
*** On the currency markets, the euro is worth $1.4203 79.4 pence sterling.
