More defaults on bank loans
This is according to Moody’s analyst, Ross Abercrombie who said that considering the housing and commercial property sectors have slowed, asset quality indicators have begun to show signs of deterioration.
Loans in arrears are rising, eroding banks’ “previously good profitability,” while provisions for bad debt will rise from “historical lows,” he said.
The country’s banks are also highly exposed to buy-to-let loans, according to Mr Abercrombie.
About 26% of loans in Ireland are to landlords, compared with 10% in Britain.
The ISEQ index of shares closed up 90.80 points or 3.4% at 2,770.17 yesterday after a shaky start in early morning trading.
This was caused primarily by a sharp fall in Elan who reported a third case of the brain disease progressive multifocal leukoencephalopathy (PML) in a patient taking its multiple scelroris drug Tysabri since the drug’s return to the market in 2006. The stock closed down 93c at 4.92.
Shares in AIB closed up 30c or 9% at €3.65, Bank of Ireland gained 5c or 3% to €1.63, Anglo Irish Bank jumped 29c or 17% to €1.99, while Irish Life & Permanent finished up 5c or 2% at €2.15.
In the construction sector CRH soared €1.32 to €16.70, Kingspan fell 13c to €4.51, while Grafton Group dipped 4c to 2.40.
Ryanair moved up 3c to 2.50, Paddy Power progressed €1.10 to 12.30, Kerry Group fell back 80c to 18.00, while Clonmel drinks company C&C increased 5c to €1.12.
