Banks face bigger hit on loans

BANK of Ireland and Allied Irish banks could face heavier discounts on their bad loans than previously forecast, it has emerged.

AIB, which has the biggest exposure to bad debts in land and property, may be hit by a discount of 25%, not the 20% previously suggested, on the transfer of its loans.

The likelihood of the bank facing a bigger hit on its loans follows intense political pressure from the Green Party and others who demanded the taxpayer be given greater protection with regard to the €90 billion loan book to be transferred to the state-run National Asset Management Agency in the coming months.