Uncertain but still confident, banks ring in a better new year

The three domestic banks finished 2013 in a much healthier position compared with 12 months ago, although it is far too early to say the sector has returned to normality.

Bank of Ireland, AIB, and Permanent TSB were not required to raise new capital following balance sheet assessments completed by the Central Bank at the end of November. However, all three will have to increase their loan loss provisions.

Bank of Ireland had to increase such provisions by €1.3bn. The part-State-owned bank disputed the methodology used by the Central Bank to arrive at this figure. Unfortunately for the bank’s shareholders and potential investors, there is little clarity on this issue.