Monday 27 January 2020

AIB and BoI in most vulnerable European group

Laura Noonan

IRELAND's two biggest banks would be among Europe's most vulnerable institutions in the event of another major financial shock, the stress test results suggest.

An analysis of the results shows AIB's stress-test score was the 11th poorest in the group of 84 banks that passed. Bank of Ireland came in 24th from the bottom, tied with two other banks.

The tests probed how 91 European institutions would fare in the event of a double-dip recession and a sovereign debt crisis. The pass-mark was set at a tier one ratio of 6pc.

The highest tier one score was achieved by Spanish player Banca March SA, which emerged with a ratio of 19pc.

AIB's tier one score came in at 6.5pc. Bank of Ireland scored 7.1pc. The average score among the 84 passing banks was 8.9pc.

Sources pointed to a statement by the Financial Regulator which showed that the Irish banks would have got higher scores if it hadn't adjusted the results to reflect local issues.

Regulators from other countries may also have marked down their banks' figures.

Irish Independent

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