More defaults on bank loans

ASSET quality indicators at Irish banks, many of which saw their share prices jump yesterday, are deteriorating as a property market slump forces more borrowers to default on 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.