Shares drop amid bank recapitalisation speculation

SPECULATION that the Government will present its bank recapitalisation plans next week sent shares down almost 1% yesterday, with banks the main casualties.

Analysts said banks would worry that they would have to raise more capital than earlier thought, following reports over the weekend said the valuation of the first tranche of loans to be transferred to NAMA by next week would cause a negative surprise.

In early morning trading, shares in AIB were down 7%, while Bank of Ireland shed 6.7% and the European banking sector was 1.7% weaker.