The Iseq index was down this morning ahead of the Minister for Finance's statement later today on the future of five key financial institutions.
By 3.15pm this afternoon, AIB shares were down by 8.5 per cent to €1.25; Bank of Ireland was up 1.12 per cent to €1.26 after earlier falls, while Irish Life & Permanent was also in negative territory, down 1.34 per cent, to €2.85.
Media reports that the Government could end up owning 40 per cent of Bank of Ireland and 70 per cent of AIB had a serious impact on both banks on the Iseq yesterday.
AIB bore the brunt of the sell-off, and saw nearly 20 per cent – or 33 cent – wiped off its share price. It finished the day just below €1.37. Bank of Ireland tumbled by a little more than 10 per cent, or 14.5 cent, to just under €1.25.
Minister for Finance Brian Lenihan said he would unveil a recapitalisation plan for the banks today that would draw a line under the financial crisis “once and for all”.
The National Asset Management Agency will release details of the discounts on the first loans transferred from the institutions before the Minister’s statement. Irish Nationwide and EBS will transfer the first loans today.
Irish banks will require up to €22 billion to cover losses on property loans moving to the National Asset Management Agency (Nama) and higher future losses on other loans as they meet strict new rules set by the Financial Regulator, The Irish Times has learned.
AIB requires some €6 billion to €7 billion, while Bank of Ireland will need €2.5 billion to €3 billion.
Elsewhere on the Iseq, building company McInerney Holdings fell 3 per cent in early movement after reporting a loss before tax of €25 million in 2009 as compared to a pre-exceptional loss before tax of €47 million in 2008. Bakery group Aryzta and Dragon Oil also posted drops.