Outlook for banking sector ‘stable’

THE outlook for the Irish banking sector remains stable, though there is a risk that a serious fall in house prices could hit its profitability, a leading credit ratings agency said yesterday.

Moody’s Investors Services says that although Irish banks are heavily reliant on mortgage lending, they will continue to see strong profitability unless the housing marker deteriorates.

It said while loan-loss provisions are likely to increase by year-end, the underlying asset quality of Irish banks remains relatively robust.