Citi predicts decline in earnings and cuts forecasts for three Irish banks

IN its latest report on Irish banks, the investment research arm of global financial services giant Citigroup has downgraded its recommendations on Bank of Ireland and Anglo Irish Bank, and said that those two, as well as AIB, will probably see earnings decline in their next financial year.

Citi has cut its full-year 2009 earnings-per-share forecasts by 31% for Bank of Ireland, 18% for Anglo Irish Bank and 7% for AIB. It has also downgraded its investment recommendations on Bank of Ireland and Anglo to sell, but has retained its hold recommendation on AIB, saying it is the best diversified of the three banks.

“Irish banks are heavily exposed to property in Britain and Ireland,” the Citi report said.