Strategic Finance
Bank of Ireland tipped to move higher |
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| Strategic Finance | |
| Written by Paul Williams | |
| Monday, 14 June 2010 | |
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Central Bank of Ireland says it has a good view of losses at main Irish banks.
Bank of Ireland (NYSE:IRE) has been upgraded by Nomura. In New York the banks shares are expected to open higher with shares higher 0.99% at 4.08 in pre market trading. The positive view comes as Central Bank of Ireland Governor Patrick Honohan said Monday that the government and authorities now have a "good picture" of the scale of banking losses, but that there will be further losses related to smaller loans. Homegrown factors accounted for around three quarters of the current downturn, he said. But, he added, the property bubble fueled by Irish banks was to a large extent financed from abroad, which makes the subsequent recovery in the construction industry "more complicated." The governor told a conference at Trinity College Dublin on international finance that the sharp fall in interest rates also contributed to the aggressive lending: "There was the perception that the Celtic Tiger could have gone on forever, which of course it couldn't." Ireland's banks were particularly hard hit by Ireland's property market crash. They made big loans to property developers, many of which are unlikely to be repaid, despite the central bank saying banks were stress-tested, leading the Irish government to pump billions to re-capitalise them.
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