AIB takes a hit as bad loan exposure remains unclear
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ALLIED Irish Banks took the brunt of the hit when bank shares continued to fall yesterday. Shares in AIB finished off 17c at 75c.
Analysts said the reason for the more dramatic slump in the stock was probably due to a number of factors.
AIB has yet to show its hand in relation to its exposure to bad debts following on from Bank of Ireland's announcement on Thursday that its loan loss impairment charge for the three years to March 31, 2011, could hit €6bn, up from an estimate of €3.8bn in November.
AIB, which said in November that its bad loan impairment pointed to a combined charge of more than €2.35bn between 2008 and 2009, is expected to increase its guidance when it reveals full-year figures early next month.
The bank is also exposed to markets like the US and Poland, which have been hit by the global recession.
Shares in Bank of Ireland finished the day down 1c at 50c while Irish Life & Permanent fell 7c to 1.58c.
Yesterday Irish Life & Permanent denied that it had any reciprocal agreement with Anglo Irish Bank in relation to deposits of billions from the latter including €4bn on September 30, the last day of Anglo's financial year and the same day the Government introduced its €440bn blanket guarantee scheme.
Denial
The denial came as Anglo issued a statement claiming such an agreement.
The emergence of the deposits led to a number of resignations from the IL&P board during the week including chief executive Denis Casey.
Banking shares have closed down for the past two days despite the mid-week €7bn recapitalisation of AIB and Bank of Ireland.
- Ailish O'Hora
