Bank shares tumble ahead of reports

BANK shares plunged yesterday as the market readied itself for another week of financial reports.

AIB fell 19% to 55 cent in Dublin, extending its decline this year to 68%.

Bank of Ireland shares lost 22% to 38 cents, while Irish Life and Permanent fell 8% to €1.44. Moody’s Investors Services downgraded the long-term bank deposit rating and the senior debt rating of Irish Nationwide Building Society to Baa3 from Baa1. The outlook on Irish Nationwide is negative, it said.

Last week proved one of the most tumultuous yet for banks as the much awaited €7 billion bank re-capitalisation was overshadowed by Bank of Ireland’s statement on its bad loans and the Anglo Irish Bank/Irish Life and Permanent deposit transfer scandal.

Last week Irish banks lost 35% of their values and this Friday all eyes will be on Anglo Irish as it is expected to publish its annual report.

The ISEQ index finished down 4% as investors remained very cautious of the Irish banking sector. In the construction sector, CRH plunged 6.4% or €1.19 to €17.56, despite news that both the US House and Senate approved the stimulus package, which is to be signed by President Obama.

CRH was reacting to a story in the Sunday Telegraph that said management is considering a €1 billion rights offering. The Dublin-based company is “examining” a share sale, the Telegraph said. CRH external spokesman Robin Walker at Finsbury said the company doesn’t comment on market speculation.

The Irish supplier of asphalt and concrete slabs may be looking to raise money from investors, anticipating it can take advantage of rivals in financial distress after a construction slump spread to Europe from the US, analysts at Bloxham Stockbrokers in Dublin said. “With CRH competitors faced with asset disposals at the worst point in the cycle for pricing, the Irish-based group has a superb opportunity to acquire long-tailed assets at knock down prices.”

Kingspan fell 19c to €2.12 and Grafton Group decreased 16c to €1.44.

Elsewhere, Ryanair lost 2c to €3.12, Kerry Group shed 13c to €14.85 while Elan was 14c down at €15.78.