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FitzPatrick dismisses negative UBS report on Anglo

Anglo Irish Bank chairman Sean FitzPatrick yesterday described the institution's poor share performance as "undeserved" but admitted that it will take some time before it recovers to levels seen last year.

Mr FitzPatrick told a gathering of roughly 200 shareholders at the bank's agm in Dublin's Mansion House that he fundamentally disagreed with a report by Swiss bank UBS this week that cautioned investors about buying Anglo Irish Bank stock. Shares in all the Irish banks have slumped in recent months on the back of global turmoil in the markets and concerns over the health of Ireland's property market.

UBS said that Anglo and AIB are the two Irish banks with the "greatest exposure" to commercial property and that the risks to the sector in Ireland are "increasing rapidly". It claimed that Irish commercial property could be overvalued by as much as 30pc. Anglo Irish Bank's loan book currently stands at about €67.1bn, with €60.39bn of that invested in commercial property.

"UBS is entitled to its view," said Mr FitzPatrick, "but I disagree fundamentally with it." He added that the bank is unconcerned whether the value of a commercial property falls, but rather about the ability of the borrower to repay.

"Our exposure is not to the building, it's to the money that comes from the leasing of it," he said. "If the value of the property goes down, it doesn't matter. We still get our loan repaid."

The first four months of the financial year had delivered a strong performance for Anglo, said Mr FitzPatrick, who reaffirmed earnings forecasts for the current financial year.

UBS said that it remains concerned that the rapid increase in commercial Irish retail asset values in recent years has been underpinned by strong growth in retail sales. It added that as consumer confidence falls, retail sales would slow, leading to extra retail space capacity coming into the market.

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