KBRA Europe Releases Research – Irish Banks’ 2019 Results: Asset Quality Improvements and Profitability Headwinds

DUBLIN--()--Kroll Bond Rating Agency Europe Limited (KBRA) comments on Irish banks’ 2019 earnings results. The banks—Bank of Ireland, Allied Irish Banks plc, Ulster Bank Ireland DAC, Permanent TSB, and KBC Bank Ireland plc— delivered a sound performance in 2019, helped by a supportive economic environment despite Brexit-related uncertainties. The banks reported improved asset quality, strong capital ratios, and sound funding profiles, although profitability remained under pressure. KBRA continues to monitor the potential direct and indirect effects of the coronavirus disease (COVID-19) on the banking sector and wider economy. Please refer to our publication of KBRA Monitors Coronavirus (COVID-19) Credit Impact by Sector for more detail.

The main takeaways from the report include:

  • Gross loan contraction at three banks, mostly due to legacy portfolio sales; new lending continues to rise.
  • Profitability is under pressure from the low interest rate environment and negatively impacted by legacy issues.
  • Accelerated reduction of NPLs; further sales and/or securitisation of legacy portfolios expected in 2020.
  • Strengthened capital positions in light of improved risk profiles.
  • Increased core deposit funding and successful issuances of bail-in-able debt.

To view the report, click here.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.

Contacts

Analytical:
Joanna Drobnik, CFA, Director, Financial Institutions
Dublin
+353 1 588 1250
jdrobnik@kbra.com

Joe Scott, Managing Director, Financial Institutions
New York
+1 (646) 731-2438
jscott@kbra.com

Business Development Contact:
Mauricio Noé, Senior Managing Director
+44 777 193 6570
mnoe@kbra.com

Contacts

Analytical:
Joanna Drobnik, CFA, Director, Financial Institutions
Dublin
+353 1 588 1250
jdrobnik@kbra.com

Joe Scott, Managing Director, Financial Institutions
New York
+1 (646) 731-2438
jscott@kbra.com

Business Development Contact:
Mauricio Noé, Senior Managing Director
+44 777 193 6570
mnoe@kbra.com