Bank survey finds confidence in recovery

A banking survey released today has found relatively high levels of confidence in the Irish economic recovery.

A banking survey released today has found relatively high levels of confidence in the Irish economic recovery.

According to the latest Bloxham Irish banking survey, 77 per cent of institutional respondents and 63 per cent of retail respondents feel the case for investing in Ireland, through either equities or bonds, has improved over the past 12 months.

More than 60 per cent of those questioned feel a majority stake by Government - ie, greater than 50 per cent - would negatively affect their decision for future investment in the Irish banks, however, and this figure rose 69 per cent among holders of AIB and Bank of Ireland, illustrating, Bloxham said, the pronounced impact on shareholders should the Government end up with majority stakes.

Most bank shareholders would support a rights issue at AIB and Bank of Ireland, but there was declines in retail support for rights issues in both banks since a similar Bloxham survey in July 2009 survey. Bank of Ireland received greater institutional and retail support for a rights issue than AIB - as was the case in the July study.

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The survey also found 80 per cent of respondents feel the National Asset Management Agency has or will improve sentiment toward the Irish economy. Institutional investors are slightly more confident Nama's impact, but support generally is widespread across investors.

In July 2009, most investors (78 per cent) saw house prices dropping by more than 5 per cent in the next 12 months, but that figure has fallen to 45 per cent, reflecting a "significant improvement" in sentiment toward the property market generally, Bloxham said. Retail respondents are markedly more positive on house prices than institutions.

The latest Bloxham Irish banking survey was completed between February 18th and February 23rd, 2010. Of the 490 respondents, 465 completed the survey.