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Dec 18 2018, 07:50 GMT
Ratings and price correct at time of issue
|Company||Rating||Date||Previous Rating||Date||Closing Price|
|Bank of Ireland||OUTPERFORM||11/03/13||Neutral||14/08/12||495c|
|permanent tsb Group||OUTPERFORM||01/08/18||Neutral||03/08/17||158c|
Irish politicians are correct to highlight the significant differential in pricing between Irish mortgages and the rest of Europe. Yet their ire is misdirected – focussing on pricing alone is overly simplistic and an inaccurate portrayal of the Irish market due to the disregard for Irish banks’ significantly more elevated capital requirements compared with peers. To this end, the 2018 EBA transparency exercise is well timed – showing capital requirements of 1.9x times versus peers at H1 2018; this does not include the full impact of TRIM, which lifts the capital required to 2.4x the average.