Monday 16 September 2019

Ireland's financial system hugely exposed to Brexit downturn

More than a quarter of lending by main Irish banks to borrowers in the UK

The Central Bank building
The Central Bank building
Donal O'Donovan

Donal O'Donovan

More than a quarter of lending by the main Irish banks is to borrowers in the UK, leaving the financial system here hugely exposed to a Brexit downturn.

UK-based borrowers account for 26pc of lending by retail banks here, according to the Central Bank of Ireland's latest Macro-Financial Review.

It is identified among the main Brexit related risks.

Bank of Ireland has a significant retail bank in Britain, while AIB has a business in Northern Ireland.

It means any economic shocks arising from Brexit could reduce bank profitability and have a material impact on the credit quality of banks’ loan portfolios, the Central Bank said.

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