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S&P's says Irish banks still not back to 'business as usual'

S&P said the banks' results for 2017 show they are still working through legacy problems, including non-performing loans
S&P said the banks' results for 2017 show they are still working through legacy problems, including non-performing loans

Rating agency Standard and Poor's has said that while the country's banks are rebuilding their creditworthiness, they are still not back to "business as usual". 

S&P said the banks' results for 2017 show that they are continuing to work through legacy problems, while new challenges are also emerging. 

It noted that one of the main legacy issues is the level of non-performing loans at the Irish banks and how they work them out, either through restructures, write-offs and selective portfolio sales. 

The rating agency also said that the Irish lenders will have to adapt to the changing world of banking that has emerged since they were dealing with their past mistakes. 

These challenges include more demanding requirements from customers and regulators, and the need for an enhanced digital capability.

"Operating in a small market, Irish banks will have to work extra hard to better adapt their cost base in a low interest rate environment," S&P's said.

Standard & Poor's raised its ratings on AIB and Bank of Ireland in December from stable to positive and noted from the banks' 2017 results that nearly all of them reported a profit.

The agency also said that the still buoyant Irish economy, and the strengthening property market, will further the banks' progress on working through their non-performing loans this year and next.