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Feb 3 2022, 08:10 GMT
Banks
Pay inflation incoming
- Sectors : Banks
- Companies : permanent tsb Group | AIB Group | Bank of Ireland
Ratings
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 | 246c |
| Bank of Ireland | OUTPERFORM | 11/03/13 | Neutral | 14/08/12 | 617c |
| permanent tsb Group | OUTPERFORM | 04/02/21 | Neutral | 06/03/19 | 167c |
DAVY VIEW
Irish banks have managed cost bases within the context of increases to base salaries over the past number of years. The current round of inflation will likely be higher yet changes in work practices provide opportunities to offset this dynamic. Efficiency ratios are improving due to a combination of cost reductions and higher income but will remain elevated relative to standards of c.50% — increases in ECB interest rates, specifically the Main Refinancing Rate, will be key to further improvements beyond forecast.
