More defaults on bank loans

ASSET quality indicators at Irish banks, many of which saw their share prices jump yesterday, are deteriorating as a property market slump forces more borrowers to default on loans.

This is according to Moody’s analyst, Ross Abercrombie who said that considering the housing and commercial property sectors have slowed, asset quality indicators have begun to show signs of deterioration.

Loans in arrears are rising, eroding banks’ “previously good profitability,” while provisions for bad debt will rise from “historical lows,” he said.

The country’s banks are also highly exposed to buy-to-let loans, according to Mr Abercrombie.

About 26% of loans in Ireland are to landlords, compared with 10% in Britain.

The ISEQ index of shares closed up 90.80 points or 3.4% at 2,770.17 yesterday after a shaky start in early morning trading.

This was caused primarily by a sharp fall in Elan who reported a third case of the brain disease progressive multifocal leukoencephalopathy (PML) in a patient taking its multiple scelroris drug Tysabri since the drug’s return to the market in 2006. The stock closed down 93c at 4.92.

Shares in AIB closed up 30c or 9% at €3.65, Bank of Ireland gained 5c or 3% to €1.63, Anglo Irish Bank jumped 29c or 17% to €1.99, while Irish Life & Permanent finished up 5c or 2% at €2.15.

In the construction sector CRH soared €1.32 to €16.70, Kingspan fell 13c to €4.51, while Grafton Group dipped 4c to 2.40.

Ryanair moved up 3c to 2.50, Paddy Power progressed €1.10 to 12.30, Kerry Group fell back 80c to 18.00, while Clonmel drinks company C&C increased 5c to €1.12.


Lifestyle

Throw all the veg you’ve got into this easy dish.Jack Monroe’s recalibration supper recipe

In a time when our shopping and cooking needs to be efficient and easy, we are bringing back our One List, Five Meals recipe pages.Michelle Darmody's One list, Five meals

What is the future of fashion and how will the ‘high street’ look when this is all over? Corina Gaffey asks those in the knowThe future of fashion: How the crisis will impact the retail industry and what we wear

Surveying the global market, Des O’Sullivan says when the going gets tough, the tough get goingHow art world is putting changed times in picture

More From The Irish Examiner