December 17, 2015 / 12:45 PM / 2 years ago

Fitch: Positive Outlook for Irish Banks in 2016

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: 2016 Outlook: Irish Banks here LONDON, December 17 (Fitch) Fitch Ratings says the 2016 sector outlook for the Irish banking sector is positive, based on on-going improvements in the banks' asset quality, business prospects, profitability and capitalisation. This partly mitigates the high proportion of problem loans (including either non-performing or low-yielding loans as well as forborne, restructured, impaired or defaulted) still on these banks' balance sheets. Fitch expects the improvements in profitability seen this year to stabilise in 2016, as new lending growth at firmer margins, and low loan impairment charges and funding costs are counterbalanced by lower gains on sale on securities and smaller releases of impairment reserves. We expect improving asset quality to be supported by continued restructuring of problem loans and large asset disposals, although the pace of the latter is subject to continued investor appetite. Capital ratios have risen steadily across the sector, as a result of deleveraging and improved internal capital generation and we expect this trend to continue in 2016. Following a peer review on 15 December 2015, Fitch has upgraded the Long-term Issuer Default Ratings (IDRs) and Viability Ratings (VRs) of Bank of Ireland (BOI) to 'BBB-'/'F3/'bbb-' from 'BB+'/'B'/'bb+' and the Long-term IDR and VR of Allied Irish Banks plc's (AIB) to 'BB+'/'bb+' from 'BB'/'bb'. AIB's Short-term IDR was affirmed at 'B'. The Outlook for the Long-term IDRs of both BOI and AIB is Positive. UBIL was last reviewed in May 2015. Fitch's '2016 Outlook: Irish Banks' is available at www.fitchratings.com or by clicking on the link above. Fitch also published yesterday a Rating Action Commentary on BOI and AIB, which is available on www.fitchratings.com. This includes each issuer's key rating drivers and rating sensitivities and lists of all rating actions taken. Contact: Claudia Nelson Senior Director +44 20 3530 1191 Fitch Ratings Limited 30 North Colonnade London E14 5GN Marc Ellsmore Analyst +44 20 3530 1438 Aabid Hanif Associate Director +44 20 3530 1438 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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