Moody: Banks survive Brexit

Irish banks, despite facing a drag on profitability from problem loans, will fare fairly well over the next couple of years mainly because the economy will survive the fallout from the Brexit shock, Moody’s Investors Service has predicted.

In an update to its banking review, the ratings firm left unchanged its “positive” credit outlook for the Irish lenders over an 18-month horizon, and projected their profitability and quality of their loans will improve, despite facing the “most critical issue” of €41.5bn problem loans that weigh on their balance sheets.

The banks’ asset quality improves hand-in-hand with an economy which it forecasts will grow 3.4% and by 3.1% this year and in 2017, because it sees the concerns from Brexit to be “manageable”.