‘Margin pressures’ to hit top two banks

INCREASED margin pressure is likely to hit profits at the country’s two largest banks in the current year.

In its analysis, the broker – once a Bank of Ireland subsidiary – referred to BOI’s warning to its annual general meeting last Friday that pressure on lending margins had become an issue because the economy remains in the worst slump of any developed economy.

The “key messages” from the bank’s AGM was that it had to cut margins to sustain its lending, while on the plus side the bank’s outgoing chairman, Richard Burrows, said the bank was comfortable with its bad debt estimates through to 2010 and it saw no reason to increase its provisioning from the levels previously indicated.