Sunday 4 December 2016

BoI 'needs more loss provisions'

Published 24/02/2012 | 05:00

BANK of Ireland hasn't classified nearly enough loans as "impaired" and hasn't taken adequate loss provisions against the impaired loans it has recognised, according to an analysis by NCB.

  • Go To

But the broker held its "buy" rating on the Richie Boucher-led bank, stressing that it has enough capital to withstand a "material increase" in impairment charges.

The report, circulated to NCB clients last night, comes after BoI revealed on Monday that it had taken €1.9bn in loan loss provisions for 2011. NCB had been expecting €3.3bn.

In the note, NCB described the lower-than-expected figure as a "timing issue" and said the €8.9bn of losses it expects by the end of 2013 would "still be incurred in the three-year period".

The broker believes that impairments will accelerate in 2012, with 50pc growth in the number of Irish mortgages classed as impaired and a doubling of UK impaired mortgages "albeit off a low base".

But the broker remains positive on BoI's general prospects, praising the bank for its "excellent" result deposits, where the bank brought in €8bn of new cash since July.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business