Fitch unlikely to upgrade positions on banks

Leading credit rating agency Fitch is unlikely to upgrade its positions on the main Irish banks next year, but stressed they are in recovery mode.

In a report on Ireland’s main banks published yesterday, Fitch said that Bank of Ireland and AIB “are on the path to recovery, despite their negative rating outlooks, which are driven solely by the weakening of assumptions around sovereign support”.

Fitch currently has a BB- and B+ rating on Bank of Ireland and AIB respectively. While still with negative ratings, the upward trajectory of both banks’ viability ratings are based on their improving, but still weak capital positions and enhanced capital flexibility now that both institutions have become profitable, the agency said.