Banks make gains despite Zoe group's problems

DUBLIN REPORT: Iseq:2,892.21 (+44.82) Settlement date:August 17th

THE IRISH market outperformed its peers yesterday with the news dominated by the fallout from the failure of part of the Liam Carroll-controlled Zoe group to win court protection from its creditors and Smurfit Kappa’s reporting of an 88 per cent fall in earnings per share.

The banks opened down and but recovered ground during the day. Dealers said their performance was not hit by the news that a liquidator is set to take over part of leading property developer Mr Carroll’s empire on foot of a court application by ACCBank, but instead by movements in the US.

A sell-off in New York on Monday night hit values early in the day, but a recovery across the Atlantic at lunchtime, which was subsequently mirrored in Europe, lifted the financials as business closed yesterday.

AIBdipped by almost 3.3. per cent in the morning, but closed 1.84 per cent up at €2.047, with around 1.7 million shares traded in Dublin.

Bank of Ireland'sfall was sharper in the morning, with over 4 per cent wiped off the institution's value. It also recovered, and by the close of business it had added 0.4 per cent to €2.022. Close to 1.9 million of the bank's shares changed hands in Dublin.

Paper and packaging group, Smurfit Kappawas responsible for the only corporate news of note.

While the company reported a 73 per cent fall in pretax profits, news that management intends increasing the price of a key product drew investors to the stock, which added 8.24 per cent to close at €4.60. Volumes were reasonable, with 2.16 million shares traded in Dublin.

The Iseq's biggest stock, building materials group, CRH, added 2 per cent to close at €17.75. Dealers said that good news from US housebuilders boosted its performance yesterday.