Bank shares up after positive stress tests

THE two main banking stocks – Bank of Ireland and AIB – both grew by around 5% yesterday as investors reacted positively to Friday’s news of them passing their EU stress tests.

Given that both banks were set an 8% tier one capital ratio target by the Irish authorities earlier this year – which Bank of Ireland has effectively met and AIB is targeting – the 6% threshold put forward by the EU was always likely to be met by the Irish banks.

Despite that, both banks’ share prices were largely unmoved on Friday evening.