Bank shares slipped on the Irish market this morning as the market digested yesterday's publication of the business plan for the National Asset Management Agency (Nama).
The plan used a projected haircut of 50 per cent for loans going forward, and said only 25 per cent of the loans were expected to produce income for the agency, compared to 40 per cent in an initial draft business plan.
Earlier today, Minister for Finance Brian Lenihan said the draft business plan was based on information supplied by the banks, and further iinvestigation led Nama to arrive at
AIB was the biggest loser of the morning, dipping 6.9 per cent to almost 88 cent by 11.30 am. Bank of Ireland lost 3 per cent to trade at 64 cent.
Irish Life and Permanent was also affected, although it is not particpating in Nama. Its shares lost 5.6 per cent to trade at €1.50.
Analysts said the revised plan was based on more realistic assumptions around key inputs such as the level of income-producing assets and LTVs. Davy stockbrokers said the there was still a degree of uncertainty but the plan has been based on "extensive due diligence".
Goodbody analyst Ken Darmody said it was more important to focus on changes since the first tranche of loans had been transferred to Nama.
"Comments within the plan make reference to 'the advance preparations made for the imminent acquisition of €13bn of loans in tranche 2'. This suggests that we should not expect material differences in the next haircut due soon."