‘Stress tests’ show bad loans must be dealt with urgently

New urgency is needed to review the huge number of impaired loan books after stress tests showed the Irish banks remain among the weakest in Europe, a leading banking expert has said.

The European Banking Authority (EBA) stress tests applied tests to 51 lenders across Europe, including Allied Irish Banks and Bank of Ireland.

AIB fared poorly, with its capital ratio falling as low as 4.3% by the end of 2018 under a future economic shock. With a 6.1% capital ratio, Bank of Ireland performed better but still lagged many European peers.