PTSB shares stumble, while the Government delays slated AIB floatation date

Michael Noonan says ratings agencies shouldn't fear the new Government

PTSB shares stumble, while the Government delays slated AIB floatation date

Image: Photocall Ireland

Yesterday was an interesting day for Irish Banks - shares in Permanent TSB fell by close to 11% in value yesterday following its trading statement that it might not generate its targeted 10% return on capital by 2018, due amongst other issues, to challenges in the mortgage market both here and in the UK.

Shares closed last night at just over €2 per share. The bank which is still 75% owned by the taxpayer floated 25% of its shares on the stock market last Spring at €4.50 per share.

Meanwhile, Finance Minister Michael Noonan confirmed yesterday evening that it was likely to be early 2017 before implementation of the planned re-flotation of 25% of AIB on the London stock market.

Mr Noonan said banks and credit rating agencies "had nothing to fear" from the new Government despite the Programme for Government’s pledge to take "all necessary action to tackle high variable mortgage rates."

Earlier, the credit rating agency, Fitch, had raised a possible concern for investors in the banks arising from government policy on mortgage rates and impaired house loans

"The regulatory environment in Ireland strongly favours restructuring over repossessions, but a credible threat of home repossessions can incentivise borrowers to engage with lenders in the restructuring process," it said.