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MOODY’S INVESTMENT SERVICE has downgraded Bank of Ireland’s (BOI) deposit ratings reflecting Moody’s view of an increased risk to bondholders.
In a statement they said “deposit ratings to Ba2/NP from Ba1/NP and senior debt ratings to Ba3 from Ba2, prompted by the concurrent lowering of the bank’s baseline credit assessment (BCA) by two notches to b1 from ba2″.
Moody’s has also downgraded the deposit ratings of BOI’s subsidiary ICS Building Society to Ba2/NP and lowered its BCA to b1.
Reasons
They explained the reasoning behind the downgrade stating “ongoing asset-quality challenges have the potential to put pressure on BOI’s capital levels”. They said they believed these had gone beyond what was expected of the Prudential Capital Assessment Review (PCAR) undertaken by the Irish regulator in 2011.
They added that these pressures are at least “partially reflected in the adjustments required by the Central Bank of Ireland, following its Balance Sheet Assessment of BOI”.
In addition they said the closely-related risk for BOI’s bondholders stemming from the prospect of the stress test that will be undertaken by the European Central Bank in 2014.
However they said the the design of the stress test remains unclear and the results are “difficult to anticipate”.
Poor lending books
Moody’s said banks like BOI with “poor quality lending books, relatively low levels of provisions and poor profitability are at relatively greater risk of ‘failing’ the test”.
Therefore they said that any resulting material capital shortfall, if it cannot be remedied by BOI or its shareholders within a certain, still undefined period, directly raises the risks for BOI’s bondholders.
The investor service acknowledged that BOI was on an “increasingly visible return path to sustainable profitability” which they said should help it to offset some of these asset quality and capital pressures.
They added that the “moderate expectation of support” from the Irish government leads to a one-notch uplift for BOI’s senior unsecured debt ratings.
They added:
In line with previous government actions to support depositors, Moody’s continues to incorporate a higher degree of support likelihood for BOI’s deposits, resulting in two notches of rating uplift from the standalone BCA.
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I have decided to downgrade Moody’s to joke status………….
Gimp
But but but, did Moodys not see Endibas party political broadcast the other night??
Even they only got through the first 30 seconds.
More like Enema’s party political broadcast.
I’ve never seen a person clean out a country of its population and resources faster than Enema.
And this is supposed to be our strongest bank!
Here we go again…
As I understand it the loan by the taxpayer to bank of Ireland has been repaid with (significant) interest. So yes they ARE our strongest bank. And these rating agencies? Are they just hedging their bets because a stopped clock is right once a day.
BOI is the best of a very bad bunch. They will fail the stress tests because of the state of the loan book – the agency is very clear on what they say.
There’s also the 17 billion worth of trackers on the books, this is a future worry.
You need to remember that even if a stopped clock is right twice a day – it is right.
How stupid and reckless of them.
Hawking their
Doomed to fail
Loss making
Tracker.
Interest only
10x times income
Teaser rate
Low deposit
No deposit
40 year.
Un stress tested.
Mortgages.
Pushed like drugs on their dog eat dog commissions
And then turning around and foisting their losses on the backs of the taxpayer when it all backfired on them and they bust themselves through their filthy greed.
Not to mention the billions of euro of their worthless dodgy builder loans that we were forced to inherit from them via the one and only (currently under investigation/international vultures investor’s golden goose) NAMA.
This so called bank should be thoroughly investigated.
I want to hear the BOI tapes.
I wonder how many dodgy junk mortgages BOI bundled up, restamped as AAA and sold off to unknowing investors?
I wonder how many peoples pensions BOI destroyed with their dodgy dealings?
Oh well, that justifies Noonan’s decision not to attack Bouchers ‘wages’ then because clearly we need to pay those levels of recompense to attract the very best otherwise we would be f#@ked. Doesn’t it? Well?
Here we go again, we need another few billion so we can function as a bank thanks,. I hope to FCUK they don’t get another cent from the state, let’s see mr Boucher laugh at us then
Insolvent
I don’t understand who these rating companies are. What I mean is how did they not lose all credibility when they gave Lehmann brothers a AAA rating a month or so before they collapsed? Or am I missing something?
who the hell are moodys just some rich ba—-ds looking after there own who are they to downgrade anybody do they realise how many people go hungry ,without heat cant get medical care because of the trouble they course and of course the suicides that happen because of them ,, NO OF COURSE THEY DONT THEY ARE SO FAR UP THEIR OWN AR–S AND FILLING THEIR POCKETS WITH OTHER PEOPLES MONEY THEM AND BONDHOLDER ARE THE BIGGEST PARASITES THIS WORLD HAS SEEN THEY HELP NO ONE ONLY THEMSELVES.
Any chance Moody’s would rate our Political Parties?
There’s not going to be another bailout but a bail in they’ll use the deposits in the banks like in Cyprus
Buy or Sell
Any chance that their buildings can get a A+ rating?!
Gathering your money13….rant over? I don’t think you understand the position. Content of your rant is a composition of key words of the entire financial crisis picked up by you but you can’t seem to make a full sentence out of them. Bank of Ireland has paid back the taxpayer (according to independent market reports) plus a significant profit which is only right given the circumstances. But don’t worry yourself as a taxpayer….you will not be burdened by any future bad debt write offs by BofI. Get your coat
They’re not called moody for nothing.
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