Any signs of recovery in the finances of Irish banks?

Ireland's two main banks, AIB and Bank of Ireland, will report their 2013 results this week and it will be interesting to see if either is showing signs of recovery.

Bank of Ireland chief executive Richie Boucher will publish the bank's results this morning, and a loss of €870 million is expected. However, on an underlying basis, the bank is forecast to have turned profitable in the last quarter of the year.

Mortgage arrears at Bank of Ireland started declining in October, so any additional evidence on this would be of interest, according to Goodbody Stockbrokers. Any comments on opportunities to refinance loans as non-Irish banks exit, possibly stabilising the loan book, would be well received.

AIB’s results will be published on Wednesday, and it seems progress is slower at the State-owned bank, which is forecast to post a net loss of €1.67 billion. However, this is considerably better than the €3.65 billion loss reported in 2012.

Goodbody head of financials Eamonn Hughes last week noted that three banks in Spain have been mandated to sell a 7.5 per cent stake in Bankia, the first step to re-privatising the nationalised lender.

“The Spanish government holds a 68 per cent stake in Bankia, so will remain majority shareholder. However, it will be interesting to gauge appetite for peripheral bank assets from the sale, bearing in mind the Irish government has a 14 per cent shareholding in Bank of Ireland but owns over 99 per cent of AIB,” he said.