Weighing up the impact of COVID-19

  • Sectors : Banks
  • Companies : AIB Group | permanent tsb Group | Bank of Ireland


Ratings and price correct at time of issue

Company Rating Date Previous Rating Date Closing Price
AIB Group OUTPERFORM 23/01/19 Neutral 14/08/18 101c
Bank of Ireland OUTPERFORM 11/03/13 Neutral 14/08/12 184c
permanent tsb Group NEUTRAL 06/03/19 Outperform 01/08/18 45.0c


Bank share prices continue to move lower as concern regarding COVID-19 mounts. Unlike the financial crisis, banks aren’t the architects of the current crisis. As such, solvency is much stronger and liquidity levels are high following prolonged multi-year deleveraging. That said, banks are highly sensitive to macro-economic shocks – further exacerbated by IFRS 9 credit-loss modelling and the regulatory priority to reduce non-performing exposures (NPEs). Our analysis highlights that the market has priced in an abrupt shift to assume stress-test levels of credit losses rather than a V-shaped recovery.

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Mar 19 2020, 08:45 GMT