AIB credit rating may be lowered

International credit rating agency Standard & Poor’s has warned it may lower its mid-range ‘BB/B’ rating on AIB later this year, saying its outlook for the bank remains “negative”.

Despite AIB earlier this week reporting an optimistic set of annual results, which showed a 55% halving in pre-tax losses for 2013 to nearly €1.7 billion, and a commentary saying management is still targeting a return to profitability this year, S&P said its outlook on the bank reflects “what we see as the lack of certainty on the scale and timing of a potential recovery in AIB’s capitalisation by our measures”.

The agency yesterday affirmed its ‘BB/B’ rating on the Irish bank, but warned that it could be lowered by the end of 2014 “if we do not project AIB’s risk-adjusted capital to be above 3% by year-end 2014”.