Poll: Are you worried about the health of Irish banks?
The results from last week’s stress tests painted a poor picture of Irish financial institutions.
AFTER SOME POSITIVE news from Irish banks turning profits early last week, there was a stark reminder on Friday that everything isn’t as rosy as they might think.
Stress tests published at the end of last week have seen Irish banks rated among the worst financial institutions in Europe.
Conducted by European Banking Authority (EBA), the tests showed that Bank of Ireland and AIB are two of the least robust banks in Europe and are in a poor position to deal with possible economic trouble.
The results of the stress tests highlighted that AIB’s capital ratio, which tracks the equity of a bank against risks like mortgagors failing to repay loans, was below what the regulators consider a healthy level, while Bank of Ireland just hovered above the requirement.
In light of the results, the banks have moved to calm investors’ nerves as AIB affirmed that it is “well capitalised” and “generating capital”, also noting that these test results are based on its balance sheet from 2015.
Meanwhile, Bank of Ireland has stated that it is in a “strong” position and is organically generating capital.
The stress test results come less than a week after AIB announced a €1 billion profit in the first six months of this year, but this news from the EBA could impact on plans for the eventual sale of AIB.
With all that in mind, we’re asking readers: Are you worried about the health of Irish banks?
