Banks ‘will not need more capital’

The banks will not need further capital following the next round of EU-wide stress tests scheduled for 2014, according to Merrion Stockbrokers’s senior credit analyst, Ciaran Callaghan.

“However this assumes that the Irish exercises are subject to the same level of stress parameters and methodology facing European peers in equivalent tests, with no additional requirements to reach new Basel III capital or leverage ratios on a fully-loaded basis,” he said in a research note on the banks.

Mr Callaghan forecasts that impairment charges for Bank of Ireland, AIB and Permanent TSB will reach €27bn by the end of this year, which is just shy of the €27.7bn adverse scenario outlined in the Mar 2011 Central Bank stress tests.