Business Irish

Saturday 19 August 2017

There was positive news for Irish banks overnight

Moody’s lifted deposit ratings for AIB, Bank of Ireland  and Permanent tsb (PTSB) and affirmed deposit ratings on KBC Bank  Ireland and Ulster Bank. Photo: Reuters
Moody’s lifted deposit ratings for AIB, Bank of Ireland  and Permanent tsb (PTSB) and affirmed deposit ratings on KBC Bank  Ireland and Ulster Bank. Photo: Reuters
Donal O'Donovan

Donal O'Donovan

Rating agency Moody's Investors Service has upgraded the deposit ratings of all three domestically owned Irish bank, and left ratings of the other main lenders unchanged.

Moody’s lifted deposit ratings for AIB, Bank of Ireland  and Permanent tsb (PTSB) and affirmed deposit ratings on KBC Bank  Ireland and Ulster Bank.

"The main driver for the rating actions is the improvement in credit conditions in the banking system following the rapid and material deleveraging of the private sector, as well as stronger funding conditions as most banks have regained the ability to issue different debt instruments. These positive developments have been reflected in an increase in Moody's Macro Profile for Ireland," says Laurie Mayers, an Associate Managing Director at Moody's.

"The rating actions also incorporate the strengthening of the banks' credit fundamentals, especially the progress they have made in reducing non-performing assets, improving the quality of earnings and strengthening their capital metrics."

In essence Moody’s says the Irish banks are operating in an improved operating environment. It increase its Macro Profile of Ireland to 'Strong' from 'Moderate'. 

At the same time Moody’s said banks have made progress in reducing non-performing assets, improving the quality of earnings and strengthening their capital metrics.

The rating agency believes that believes that Irish banks will continue to maintain their access to the market at competitive prices during 2016 and will potentially increase their debt issuance.

Still, it said private sector debt remains very high compared to other European countries but is declining rapidly.

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