BoI shares routed for second day on Fitch warning
BANK of Ireland shares took a hammering on the market for a second day yesterday, plunging by more than 7pc over the course of the day.
The slide followed falls on Monday of as much as 5pc.
Shares in the bank closed at 15.9 cent each in Dublin yesterday having opened the week at 18 cents.
The steep declines followed a worrying review of the Irish banking sector by rating agency Fitch on Monday.
It warned that more cash could potentially be needed by all of the main banks, including largely privately owned Bank of Ireland, to meet capital rules due to be reset next year, and said that profitability may still be some way off for the country's "least worst" bank.
The worrying outlook from Fitch came as analyst at Goldman Sachs and HSBC both "sell" notes on Bank of Ireland.
Bank of Ireland was hammered on the equity market and weaker on the bond markets yesterday in the wake of the news, and as the wider appetite for risk, including Irish risk, slumps among increasingly nervous investors.
The latest falls are the biggest since may 2012 for Bank of Ireland and end a winning streak that has seen the share price rally from 11.90 cents at the start of this year to as high as 19.40 cents as recently as the last week in May.
Bank of Ireland was the biggest decliner on the ISEQ index of Irish shares yesterday.
In its latest assessment of the sector here Fitch warned that Irish banks may need to raise additional capital and said it expected impairment charges to rise this year and in 2014 as the pace at which lenders deal with their problem home loans picks up to comply with targets set by the Central Bank.