Goodbody stands by bad bank discount prediction

THE Government is likely to acquire the bad debts from the country’s two main banks, via the National Asset Management Agency (NAMA), at a considerable discount.

In a detailed report into the prospects for Ireland’s banking system, Goodbody Stockbrokers said yesterday that it is standing by its original forecast of a near 20% discount for AIB’s debts and a “haircut” of just under 17% for Bank of Ireland.

Approximately 45% of the two banks’ so-called bad loans are linked to the property and construction sector – the remainder spread across consumer loans, loans to small and medium-sized enterprises (SMEs) and residential mortgages.