Investors: The latest revelations of improper behaviour at AIB are starting to cause concern among investors in the bank. Jane O'Sullivan, Markets Correspondent, reports.
To date, the share price has been unaffected by details of overcharging and other improper practices at the State's largest bank. But the constant drip-feed of scandals has forced the investment community to sit up and take notice.
"There has been a succession of announcements about improper behaviour and the cumulative effect is starting to raise eyebrows," one market source said.
Shares in the bank closed nearly 3.5 per cent lower yesterday, amid general weakness among financial stocks. But dealers said the latest revelations at AIB were prompting queries from international investors as the problems at the bank started to surface on their radar screens.
"There was some concern over the latest news, with overseas investors calling up and saying what's going on over there," one dealer said.
Meanwhile, sources in the Irish investment community said they were watching developments at the bank closely to see how matters unfold.
"The drip feed of scandal is tarnishing the brand and we don't like that as investors," said Mr Martin Nolan, chief investment officer at Hibernian Asset Managers.
On the positive side, he noted that the AIB board and management had a good track record, having effectively dealt with the Rusnak rogue trader scandal.
Mr Séamus Murphy, banking analyst at Merrion Stockbrokers, noted that the cost to the bank of its breaches were small, given its market capitalisation of €10 billion. But he said the value attributed to AIB through goodwill of €4.5 billion might come under pressure "if these allegations of overcharging and improper procedures continue to emerge".
Another fund manager called on the bank to release full details and draw a line in the sand in relation to the latest scandal, ending worries that more is to come.
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