Friday, October 29, 2010

Irish Banks Have Little Fight (NYSE: AIB) (NYSE: IRE)

DUBLIN, IRELAND - Shares of Ireland's largest institutions, Allied Irish Banks and Bank of Ireland continue to slump. In the premarket trading shares are currently lower by 8% for IRE and 4% for AIB. The companies have consistently moved lower over the last year.

Each bank has under-provided for their future losses which will lead to future impairment charges, unless the economy substantially improves going forward. IRE and AIB have loans of around 150 billion in U.S. dollars. Yet they have provided for future losses as if they are a Canadian bank with superior loan quality. IRE only has provisions for 2.5 % of its loans. Bank of America has provisions for nearly 5%. And this is where the large losses will be seen.

To see the full AIB report click here

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