Also Ireland, Spain and Portugal are most at risk of credit rating cuts as the global financial crisis batters Europe’s weakest economies, according to insurance conglomerate, ING Group.
Its assessment of 12 economies in the euro region found Germany, the Netherlands and Finland least likely to have their ratings changed, while deteriorating public finances and government guarantees in private banking may weaken the credit profile of other countries, ING said.
“In Ireland, it’s the budget deficit and weakness in the banking sector,” said Padraic Garvey, head of debt strategy at ING.
“In Spain and Portugal, it’s more about public debt. We may see the European bonds of these countries diverge further.”
The study was based on variables including government debt-to-gross domestic product, deficits as a percentage of GDP, the state of the banking system, GDP per head and private credit, ING said.
Meanwhile, AIB advanced 1.5 cents or 2.3% to 64 cent. Bank of Ireland, the country’s biggest bank by assets fell 3.8% to 35 cent while Irish Life and Permanent fell 1.1% to e1.26.
The ISEQ index shed 3.80 points or 0.2% to 2170.08 yesterday. Trading volumes during the morning were relatively light but picked up later.
The ISEQ index has now finished in the red for eight trading days out of 10.
In construction CRH lagged 13c to e16.23. Kingspan followed suit shipping 1c to e2.09. Grafton Group managed to buck the trend adding 3c to e1.35.
Drinks company C&C gained 8c to e1 after management announced 120 redundancies as part of a cost-cutting exercise.
In Britain stocks advanced for the first time in six days, as investors snapped up bank shares trading near the lowest valuations on record and mining companies rallied with metal prices.
Royal Bank of Scotland Group, the biggest British government-controlled lender, surged 20% on speculation the terms of the government’s plan to insure banks’ assets will benefit private shareholders.
The benchmark FTSE 100 added 11.54, or 0.3%.