Fitch ratings firm: Backlog of €30bn bad bank loans

Irish banks cannot “automatically” expect to benefit from ratings upgrades in tandem with the improved credit worthiness of Irish government debt, ratings firm Fitch said yesterday.

In a glowing report last week Fitch upgraded Ireland’s sovereign debt to an ‘A’ rating, citing strong economic growth and the faster-than-expected fall in the country’s gross debt levels.

However, Fitch yesterday said that it cannot be read that the ‘A’ grade will lead as a matter of course to it upgrading Bank of Ireland and AIB, because the lenders still carry a large “backlog” of €30 billion in impaired loans on their books.