Goldman Sachs analysts reduced their earnings estimates for Irish banks next year, citing the risk of rising loan losses.
The brokerage cut its 2009 per-share profit estimate for Allied Irish Banks to €1.14 from €1.72, and downgraded its recommendation on the stock to "neutral" from "buy".
"We expect loan losses to increase across all asset classes in Ireland, the UK and the US," Goldman analysts led by Aaron Ibbotson wrote in a report dated August 22nd. "However, we believe the key cause for concern is the property developer segment, particularly in Ireland."
Bank of Ireland had its profit estimate reduced 21 per cent to 83 cents. The Goldman analysts cut their earnings estimate for Anglo Irish Bank by 16 per cent to €1.19 a share.
Allied Irish dropped 1.7 per cent to €8.01 as of 8.43am in Dublin trading. The stock has fallen 39 per cent since Goldman raised it to "buy" on April 17th, and is down 49 per cent in 2008. Bank of Ireland fell 2 per cent to €5.20, extending this year's decline to 49 per cent. Anglo Irish rose 0.2 per cent to €5.28.
Bloomberg