Bank of Ireland shares fell the most in eight years in Dublin trading after mortgage lending grew at the slowest rate since 1992 and the economy contracted in the first quarter.
Bank of Ireland dropped as much as 8.4 per cent, the biggest fall since May 2000, and traded down 8.3 per cent at €5.36 at 12.32pm. The bank's shares have fallen by almost 47 per cent this year.
Other Irish banks also declined. Shares in Allied Irish Banks fell 3.3 per cent and Anglo Irish Bank dropped by 6 per cent.
Irish Life & Permanent, the country's largest mortgage lender, dropped 5 per cent to €6.97.
The Irish Central Bank today said mortgage lending grew 11.1 per cent in May compared with 11.4 per cent in April, the slowest rate of increase in 16 years as demand for loans eased in response to falling house prices.
The economy shrank 1.5 per cent in the first quarter from a year ago, the Central Statistics office said.
"Given that the credit crunch really stepped up a gear this year, we are not so convinced that next year is the peak and in fact the credit charge will continue to rise through 2010 and 2011," said Eamonn Hughes, a Goodbody Stockbroker analyst.
Bad debt levels would rise in the second half, he also forecast.
Bloomberg