Bank of Ireland shares collapse to 83 cent

Bank of Ireland shares lost 23.5 per cent of their value today closing at just 83 cent, amid ongoing investor concern over the bank's deteriorating asset quality.

At 1.55pm the bank's shares were trading at €1.04 down over 4 per cent having rebounded from earlier lows of €0.90.

Bank of Ireland shares have lost 90 per cent of their value this year and the share price has been under renewed pressure since the release of its interim results last week.

After announcing a 32 per cent fall in underlying pretax profits last Thursday to €650 million for the half-year to September 30th, the stock fell over 8 per cent to close at €1.21, before falling again on Friday to close at €1.08.

On Friday evening Standard and Poors placed the bank's long-term counterparty credit rating of A+ on negative creditwatch.

The ratings agency took this step because of Bank of Ireland's "difficult current operating environment, and the related near and medium-term challenges to the bank's earnings presented by its deteriorating asset quality".

Last week Bank of Ireland suspended dividend payments and said it has sufficient funds to cover projected higher loan losses.

Chief executive Brian Goggin said the bank had no plans to ask shareholders or the Government for additional capital.

"I am not prepared to rule out capital raising, but it is not on the agenda at this time," he said.

Fine Gael said the share price made the issue of recapitalisation of the banks "even more urgent".

"Today's large-scale sell-off of Bank of Ireland shares is yet more evidence of the dangers of the Government's wait and see approach to the banking crisis," the party's finance spokesman Richard Bruton said.

"Too many small Irish businesses and Irish jobs are at risk from drying-up credit lines. The latest stock market movements on Bank of Ireland have again put the spotlight on the Government's lack of strategy for recapitalising Irish banks. The turmoil in the financial markets is already spilling over into the real economy with half of our sound businesses finding it difficult to raise funds."