NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a new report titled, “Irish Banks: Continued Recovery Despite Headwinds”. The report focuses on the financial position of the domestic Irish banking sector, which has seen material improvements over recent years. The Irish banks have returned to profitability, are much better capitalised, have more stable funding models and have significantly reduced their exposures to the volatile commercial real estate market. Nevertheless, despite the significant progress made so far, the level of nonperforming loans (NPLs) remains high and is the main constraint on their credit risk profiles.
KBRA believes that the credit profiles of almost all Irish banks are comfortably investment grade reflecting their fundamentally sound financial profiles and/or parental support in some cases. In view of steps taken to further reduce NPLs, increase profitability and capitalisation, credit profiles have the potential for further improvement.
Challenges include the continuing low interest rate environment, slower loan growth and the further need to streamline cost structures. Irish banks are vulnerable to a downturn in the relatively small Irish economy, which in turn is especially vulnerable to a potential negative impact from Brexit, given considerable economic and political ties with the United Kingdom.
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Kroll Bond Rating Agency, Inc. is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, Kroll Bond Rating Agency, Inc. is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.